India to Lease One-Fourth of its Strategic Petroleum Reserve to Saudi Aramco
New Delhi (Sputnik): India aims to invest heavily in augmenting energy infrastructure to eradicate energy poverty. Prime Minister Narendra Modi on Tuesday said India's quest to be a $5 trillion economy is not only about quantitative growth but also about improving the quality of life for every Indian.
In a bid to further boost its energy security, India has ensured oil supply for its strategic oil reserves from Saudi Aramco – which will only be the second country after UAE's Abu Dhabi National Oil Company (ADNOC) to have this privilege.
A preliminary pact has been signed between Indian Strategic Petroleum Reserves Ltd. and Saudi Aramco that is expected to see a greater Saudi role in setting up a second fuel reserve facility in Karnataka's Padur area.
A government official said Saudi Aramco will share one-fourth of the total reserve of 2.5 million metric tonnes in the southern Indian state of Karnataka.
"Aramco has signed an MoU for only one compartment", Chief Executive of the Indian company HPS Ahuja said while adding that the storage facility has four equal-sized compartments.
Ahuja, while talking to Reuters, said Aramco would have to keep some of the 4.6 million barrels for India's strategic needs, but could sell the rest to Indian refiners.
India has prepared underground rock cavern strategic petroleum reserve facilities with a total storage capacity of 6.5 million metric tonnes (MMT) at three locations namely Vishakhapatnam, Mangaluru, and Padur.
As per the consumption pattern, a 6.5 MMT oil reserve capacity will provide for about 11.57 additional days of India's crude oil requirement.
Saudi Arabia has also expressed interest in a planned 1.2 million barrels-per-day refinery on India's west coast.
India is the world's third largest oil consumer, and Saudi Arabia contributes around 19% of its total oil demand this year - second highest after Iraq.
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