New Delhi: In what is seen as a major strategic achievement for Modi government, the UAE is now going to open an oil storage system in India.
Abu Dhabi National Oil Company (ADNOC) will now land its crude oil in Indian oil facilities. State-run Indian strategic petroleum has signed a deal with ADNOC to let them use its storage capacity at Padur near Mangalore. With this deal India is all set to become regional storage and trading hub for oil.
The deal which got finalized during this visit of the Prime Minister to UAE, was first signed in 2017 when the crown Prince of UAE, Mohammad Bin Zayed participated in Republic day parade as chief guest. Since then the two sides have been working out the details of the deal, including easier tax norms sought by ADNOC.
ADNOC will park 5,860,000 million barrels, or a little less than a million tonne, of crude at ISPRL’s Mangalore storage facility. ADNOC will use part of this oil to supply its customers, while the rest will remain as strategic storage, to be released to meet emergencies such as supply disruption due to natural disaster or geopolitical factors.
ISPRL’s Mangalore storage consists of two compartments with a total storage capacity of one and a half million tonne. One compartment has been filled with crude bought with funds from the Centre.
The storage puts on tap oil stock for India, enhancing the country’s energy security. It will also bring economic viability to the project.
For ADNOC, storing oil in India will allow the company to efficiently and competitively meet market demand in India and across the fast-developing southeast Asian economies.
This is the latest among several investment proposals India is working on to turn its west Asian oil suppliers into strategic investors in the country’s oil economy.
Saudi Aramco, for example, is in talks with a consortium of Indian state-run oil companies for stake in a mega refinery and petrochemicals complex proposed to be built at an investment of at nearly Rs 40,000 crore.
(With inputs from TOI)