India to stash away crude oil - Equitymaster.com

Markets will remain closed on Wednesday, 14th April on account of Dr. Babasaheb Ambedkar Jayanti.

Manufacturer of Skiploader Oil Tank

The US has it. So do Japan and China. India will join their ranks with the completion of a strategic crude oil storage by October, 2011. The under-ground storages are being built at Visakhapatnam in Andhra Pradesh and Mangalore and Padur in Karnataka. A 1.3 m tonne facility will be ready in Visakhapatnam by October 2011. The huge underground cavity will be almost 10 storey tall and 3.3 km long. The 1.6 m tonne facility in Mangalore will be ready by late 2012. A 2.5 m tonne facility at close by Padur will also come up by that time. Together they will store about 5.3 m tonnes of crude oil. That is equal to about 14 days of India's oil requirement. It may be noted a 14 day reserve is still quite small compared to US stockpile of about 90 days. The project is likely to cost about Rs 30 bn.

Oil Tanks India manufacturing facility.

A strategic crude oil storage is protection from supply disruptions. Given our reliance on foreign sources of supply, that makes sense. It can also be used to store oil when prices are low and sell when they rise. Although there was a proposal to build a 45 day storage, given the cost escalation it is likely that we will have to be content with current capacity for now.

40 gallon diesel tank

Full Story: India to stash away crude oil - Equitymaster.com