The government is now making a big plan to ensure that there is no shortage of crude oil in the country in case of any emergency. India is planning to build its first commercial strategic storage of crude oil. This step is being taken to deal with the challenges posed by supply disruption in any emergency. Let us tell you, India is the third largest oil consumer and importer country in the world. According to the news of the language, according to the information received on Wednesday, the government has formed a special unit Indian Strategic Petroleum Reserve Ltd. (ISPRL) for the preparation and operation of strategic petroleum reserves in the country.
Bids invited to build underground storage
According to the news, ISPRL has invited bids to build 25 lakh tonne underground storage in Padur, Karnataka. This information has been received from the tender document. ISPRL had created storage of 53.3 lakh tonnes at three locations in the first phase. These three places are Visakhapatnam (13.3 lakh tonnes) in Andhra Pradesh, Mangalore (15 lakh tonnes) and Padur (25 lakh tonnes) in Karnataka. These are underground rock caves for storing oil.
Under the second phase, ISPRL plans to create commercial cum strategic underground petroleum reserves at Padur-II at a cost of Rs 5,514 crore. It also includes related facilities above ground. The construction work includes construction of SPM (Single Point Mooring) and associated pipelines (onshore and offshore) for strategic storage of 25 lakh tonnes of crude oil. Under the first phase, the storage has been constructed at government expense.
The construction will be done in PPP model
ISPRL said in the tender that Padur-II will be constructed in PPP (Public-Private Partnership) model. In this, private entities will design, build, finance and operate the storage. Bidders have been asked to indicate the financial grant required for construction of the storage or the premium/fee they wish to pay to the Authority. The tender document states that the project will be awarded to those units which pay higher premium/fees. Where no bidder is offering a premium, it will be awarded to the lowest grant seeker.
The country will have the first right on the use of oil
ISPRL said the maximum limit of grant for the project will be Rs 3,308 crore. A bidder seeking a grant may not pay any premium. The operator of Padur-2 will lease the storage area to any oil company wishing to store oil and will charge a fee for the same. Companies storing oil can sell it to domestic refinery companies. But in case of emergency, the country will have the first right on the use of oil. The document states that bids are to be submitted by April 22 and the tender will be awarded by June 27. ISPRL is acquiring about 215 acres of land for Padur-II. India meets more than 85 percent of its crude oil needs through imports. In such a situation, strategic reserves can be used in any emergency situation like supply disruption or war.
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