Context: Government-owned engineering consultancy firm Engineers India (EIL) is studying the prospects and feasibility of developing salt cavern-based strategic oil reserves in Rajasthan.

• This is in line with the government’s objective of increasing the country’s strategic oil storage capacity.

Crude oil and India

• India’s three existing oil storage facilities are made up of excavated rock caverns.

• The oil storage facilities are located at Mangaluru and Padur in Karnataka, and Visakhapatnam in Andhra Pradesh.

• India is the world’s third-largest consumer of crude oil.

• India imports more than 85% of its crude oil requirement.

Strategic Petroleum Reserves

• Strategic Petroleum Reserves (SPR) in India could help ensure energy security and availability during global supply shocks and other emergencies.

• India currently has an SPR capacity of 5.33 million tonnes that can meet around 9.5 days of its demand.

• India is expanding its SPR capacity by building SPR infrastructure at two locations — Chandikhol in Odisha (4 million tonnes) and Padur in Chennai (2.5 million tonnes).

• India’s strategic oil reserves come under the Petroleum Ministry’s special purpose vehicle Indian Strategic Petroleum Reserve (ISPRL). 

Salt cavern-based reserves

• The Salt caverns-based oil storage facilities are naturally well-sealed, and engineered for rapid injection and extraction of oil. 

• The salt that lies the inside of the caverns has low oil absorbency.

• This creates a natural impermeable barrier against liquid and gaseous hydrocarbons, making the caverns apt for storage. 

• The Salt caverns can also store liquid fuels and natural gas including compressed air and hydrogen.

Salt Cavern-based Storage v/s Rock Cavern-based Storage

• Rock caverns are large man-made spaces in the rock and are considered the safest means of storing hydrocarbons.

• In comparison to rock caverns, salt caverns are considered cheaper and less labour- and cost-intensive.

• Salt cavern-based oil storage facilities are also naturally well-sealed, and engineered for rapid injection and extraction of oil.

• This makes them a more attractive option than storing oil in other geological formations.

• The entire strategic petroleum reserve programme of the United States has so far been based on salt cavern-based storage facilities.

• In comparison, India’s all 3 strategic petroleum reserves are made up of excavated rock caverns.

Strategic petroleum reserves programme

• India’s strategic oil reserves are part of the effort to build emergency stockpiles

• It is similar to the reserves that the US and its Western allies had set up after the first oil crisis of the 1970s.

• The 3 existing rock cavern-based facilities were built during the first phase of the programme.

• The Crude oil from the reserves will be released by an empowered committee set up by the government during supply disruptions caused by natural calamity or global event leading to an abnormal increase in prices.

• The International Energy Agency (IEA) recommends that all countries should hold an emergency oil stockpile sufficient to provide 90 days of import protection.

• There is sufficient storage to meet around 74 days of the India’s petroleum demand.

• Out of these the oil marketing companies (OMCs) have storage facilities for crude oil and petroleum products for 64.5 days.

• India has decided to commercialise its SPR, as part of which the Abu Dhabi National Oil Company (ADNOC) had stored crude oil in the Mangaluru strategic reserve.

Second phase of the Strategic petroleum reserves programme

• The government wants to develop strategic reserves through public-private partnerships in order to reduce government spending and use the commercial potential of the reserves.