Salt caverns as strategic petroleum reserves in India
Salt caverns as strategic petroleum reserves in India
Subject :Geography
Section: Economic Geography
Context
India is exploring the idea of developing salt caverns in Rajasthan as strategic petroleum reserves and public sector consultancy Engineers India Limited(EIL) has been tasked with studying its prospects and feasibility.
Existing strategic petroleum reserves
India has three strategic petroleum reserves at Mangalore, Padur and Visakhapatnam, but all of these are made up of excavated rock caverns. Over the past decade a strategic oil reserve was to be built at Bikaner, Rajasthan but the program never took off. With a salt cavern based strategic oil reserve being deliberated, Rajasthan has once again come into picture. Presently, India does not have technology to excavate salt caverns and we are tying with Germany on this.
Salt cavern
“There are formations in geology which have salt inside. The salt has to be taken out and the caverns have to be prepared for storage of crude. Most of US strategic oil reserves are in salt caverns. Unlike rock caverns, which are developed through excavation, salt caverns are developed by pumping water into geographical formation with large salt deposits to dissolve the salt. Then the salt cavern is created by draining out the salt dissolved in water. Developing salt caverns is said to be easier, faster, less labour- intensive, and cheaper than building a rock cavern.
Why the need
India’s strategic petroleum reserve has a cumulative capacity of 5.33 million tonnes of crude and can meet only 9.5 days of the country’s oil demand and hence more storage caverns are needed.
About Strategic oil reserves –
- Strategic petroleum reserves are huge stockpiles of crude oil to deal with any crude oil-related crisis like the risk of supply disruption from natural disasters, war or other calamities.
- According to the agreement on an International Energy Programme (I.E.P.), each International Energy Agency (IEA) country has an obligation to hold emergency oil stocks equivalent to at least 90 days of net oil imports.
- In case of a severe oil supply disruption, IEA members may decide to release these stocks to the market as part of a collective action.
- India’s strategic crude oil storages are currently located at Visakhapatnam (Andhra Pradesh), Mangaluru (Karnataka), and Padur (Karnataka).
- The government has also given approval for setting up of two additional facilities at Chandikhol (Odisha) and Padur (Karnataka).
- The concept of dedicated strategic reserves was first mooted in 1973 in the US, after the OPEC oil crisis.
- Underground storage is, by far the most economic method of storing petroleum products because the underground facility rules out the requirement of large swathes of land, ensures less evaporation and, since the caverns are built much below the sea level, it is easy to discharge crude into them from ships.
- The construction of the Strategic Crude Oil Storage facilities in India is being managed by Indian Strategic Petroleum Reserves Limited (ISPRL).
- ISPRL is a wholly owned subsidiary of Oil Industry Development Board (OIDB) under the Ministry of Petroleum & Natural Gas.
- After the new facilities get functional a total of 22 days (10+12) of oil consumption will be made available.
- With the strategic facilities Indian refiners also maintain crude oil storage (industrial stock) of 65 days.
- Thus, approximately a total of 87 days (22 by strategic reserves + 65 by Indian refiners) of oil consumption will be made available in India after completion of Phase II of the SPR programme. This will be very close to the 90 days mandate by the IEA.
