INDIA PLANS NEW 15-20 MILLION TONNE OIL RESERVE IN MANGALORE

Why in the news?

India’s strategic oil reserve expansion aims to enhance energy security and support its bid for full membership in the International Energy Agency, amid global oil market volatility.

INDIA PLANS NEW 15-20 MILLION TONNE OIL RESERVE IN MANGALORE - UPSCsource:scribd

Project Overview:

  • Feasibility Study: The Indian Strategic Petroleum Reserves Ltd (ISPRL) is assessing the feasibility of a new strategic reserve in Mangalore with a planned capacity of 15-20 million tonnes.
  • Cost & Timeline: Estimated project cost is ₹5,000 crore. The feasibility study is expected to be completed by September 2024. If results are positive, the proposal will be submitted to the Union Cabinet for approval.
  • Current Capacity: Mangalore currently has a 1.5 million-tonne reserve as part of ISPRL’s existing 5.33 million-tonne storage capacity.

Expansion Plans:

  • Phase-II Expansion: Includes additional reserves at Padur, Karnataka (2.5 million tonnes) and Chan- dikhol, Odisha (4 million tonnes). Bids for the Padur reserve are expected to be opened this month, while land acquisition for the Chandikhol site is nearing completion.
About Strategic Petroleum Reserves in India:

Overview:

Managed by Indian Strategic Petroleum Reserves Limited (ISPRL), a subsidiary of the Oil Industry Development Board, under the Ministry of Petroleum & Natural Gas.

Current Reserves (Phase I):

  • Locations: Mangalore (Karnataka), Visakhapatnam (Andhra Pradesh), Padur (Karnataka).
  • Total Capacity: 5.33 Million Metric Tonnes (MMT).

Expansion Plans (Phase II):

  • New Sites: Chandikhol (Odisha), Udupi (Karnataka).
  • Additional Capacity: 6.5 MMT.

Storage and Supply:

  • Total Reserve Capacity: 22 days of oil consumption (10 days from ISPRL + 12 days from expansion).
  • Indian refiners maintain 65 days of industrial stock.
  • Combined Total Capacity: 87 days of oil consumption (Phase II reserves + industrial stock).

Objective:

  • Aims to approach the International Energy Agency (IEA) mandate of 90 days of oil reserves for energy security.

key Government Initiatives in Oil and Gas Sector:

Fiscal Incentives:

  • Approved incentives to attract investments and technology.
  • Aims to improve oil recovery, projecting hydrocarbon production worth Rs 50 lakh crore over 20 years.

LPG Infrastructure Investment:

  • State-run oil firms to invest Rs 723 crore in Uttar Pradesh.
  • Focus on enhancing LPG infrastructure, promoting clean energy, and creating jobs.

Natural Gas Trading Exchange:

  • Development of a transparent market for natural gas.
  • Goal: Increase natural gas share in energy mix from 6.5% to 15% by 2028-2030.

Bio-CNG Plants:

  • The Oil Ministry plans to establish bio-CNG plants and related infrastructure.
  • Initiative aimed at promoting the use of clean fuels.