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INDIAN STRATEGIC PETROLEUM RESERVES LIMITED

To ensure energy security, the Government of India had decided to set up 5 million metric tons (MMT) of strategic crude oil storages at three locations namely, Visakhapatnam, Mangalore and Padur (near Udupi). These strategic storages would be in addition to the existing storages of crude oil and petroleum products with the oil companies and would serve as a cushion during any external supply disruptions. The construction of the Strategic Crude Oil Storage facilities is being managed by Indian Strategic Petroleum Reserves Limited (ISPRL), a Special Purpose Vehicle, which is a wholly owned subsidiary of Oil Industry Development Board (OIDB) under the Ministry of Petroleum & Natural Gas. Engineers India Limited (EIL) is taken as the Project Management Consultant for all three projects.

The crude oil storages are constructed in underground rock caverns and are located on the East and West coast of India. Crude oil from these caverns can be supplied to the Indian Refineries either through pipelines or through a combination of pipelines and ships. Underground rock caverns are considered the safest means of storing hydrocarbons. The estimated cost of the project was around Rs.2400 crore at September 2005 prices. This excluded the cost of filling the crude oil in the caverns. Approval of the Union Cabinet was obtained to enhance the capacity at Visakhapatnam to 1.33 MMT and to permit utilization of the additional 0.3 MMT compartment by Hindustan Petroleum Corporation Limited (HPCL) on proportionate cost sharing basis. As a result of this approval, the strategic storage capacity is 5.03 MMT.

The approved Revised Cost Estimates for Visakhapatnam, Mangalore and Padur are Rs.1178.35, Rs 1227 crores and Rs 1693 crores respectively. The total cost of all the three projects is Rs 4098.35 crore, out of which Rs 265.79 crore is being provided by HPCL for the 0.3 MMT compartment at Visakhapatnam.

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