India to store crude oil in US strategic reserve
New Delhi/IBNS: India is set to stockpile crude oil in American strategic reserves to shield itself from supply disruptions arising out of geopolitical reasons and enable purchase of crude in large quantities when the prices plunge.
The arrangement was discussed at the second US-India Strategic Energy Partnership (SEP) ministerial on Friday co-chaired by Petroleum Minister Dharmendra Pradhan and US energy secretary Dan Brouillette.
“The sides signed a memorandum of understanding (MOU) to begin cooperation on Strategic Petroleum Reserves operation and maintenance, including exchange of information and best practices. They also discussed the possibility of India storing oil in the US Strategic Petroleum Reserve to increase their nation’s strategic oil stockpile," the two countries said in a joint statement.
India is the world's third largest crude oil importer and had a $101.4 billion crude import bill in 2019-20.
The development is being cited as one of the key outcomes of the virtual meeting between petroleum and natural gas minister Dharmendra Pradhan and US energy secretary Dan Brouillette as part of the second US-India Strategic Energy Partnership (SEP) ministerial.
After the $1.6 billion second phase of Indian Strategic Petroleum Reserves (ISPR) programme starts operating, India will have oil reserves of at least 87 days of net imports, said a Mint report.
The programme aims to add 12 days of crude storage. Together, these facilities will help support 22 days of India’s crude oil requirements, the report added.
As Indian refiners also maintain 65 days of storage, the country will have oil reserves of at least 87 days of net imports.
India's existing storage capacity of 5.3 million tonnes includes--Visakhapatnam (1.33 mt), Mangaluru (1.5 mt) and Padur (2.5 mt), and can support 9.5 days of net imports, said the Mint report.
An additional 6.5 mt of strategic crude oil reserves at Chandikhol (4 mt) in Odisha and Padur (2.5 mt) in Karnataka have been approved by the NDA government, it added.
“The SEP (strategic energy partnership) also supports USG (US government) efforts under the AsiaEDGE initiative, which establishes India as a strong energy partner in the Indo-Pacific region," said the joint statement.
The ministerial comes amid the lingering tension on LAC with China as US wants India to play a bigger role to stabilise and maintain the rule of law amid growing Chinese threat in the critical Indo-Pacific region.
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