India to double strategic crude reserve capacity

[HenryTo]

India now focusing on energy security as well.
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India to double strategic crude reserve capacity
Fri Jan 5, 2007 5:11 PM IST

NEW DELHI (Reuters) - India plans to double the capacity of its proposed strategic crude oil reserve to 10 million tonnes and hopes to have built half of it by April 2010, Petroleum Secretary M.S. Srinivasan said on Friday.

The government last year approved the setting up of 5 million tonne reserve, sufficient to meet 15 days demand, and said then that it could be doubled subject to further study.

The reserves will be used as a hedge against volatility in international crude oil markets and meet domestic demand in case of short-term supply disruptions.

"We will be in a position to complete 5 million tonnes storage in 36 months from April 1, 2007 contrary to the earlier planned 48 months," Srinivasan said at an industry seminar.

He said the private sector would be roped to help bring in the additional 5 million tonnes, but did not set a date.

"Consultations are on. Documents are ready. We are planning an additional 5 million tonnes with public-private partnership."

In the first stage crude will be stored in several locations: 1.5 million tonnes at Mangalore, 1 million tonnes at Vizag and a further 2.5 million tonnes at another location near Mangalore.

This strategic storage would be in addition to the existing crude oil and petroleum products held by oil companies.

He also said that India is looking at increasing its liquefied natural gas (LNG) imports to 20 million tonnes a year in next four to five years, a substantial increase from the current 9 million tonnes.

Asia's third-largest consumer imports 5 million tonnes of LNG a year from Qatar and buys the remainder through spot purchases.