Underground fuel storage project soon: Govt

New Delhi, Jan 7 (UNI) To combat short-term fuel supply disruptions the goverment is setting up massive strategic oil storage projects created in special underground rock caverns to be located in Mangalore and Vizag.

''This strategic storage would be in addition to the existing storage of crude oil and petroleum products with the oil companies and would provide an emergency response mechanism in case of short-term supply disruptions,'' official sources said.

Taking into account the oil security concerns of India, the government in January 2006 approved funding mechanism for setting up Strategic Crude Oil Storage of 5 million tonne (MMT) at various locations in the country, Mangalore (1.5 MMT), Vizag (1.0 MMT) and nearby location (2.5 MMT).

It was also decided to implement the project through a subsidiary of Oil Industry Development Board (OIDB).

Oil PSU HPCL completed excavation work of underground LPG cavern storage facility at Visakhapatanam which is the first of its kind in the south and south east asia. Being implemented by a joint venture of HPCL with oil major TOTAL of France, this 60,000 tonne storage will increase LPG cover by about a month for Andhra Pradesh and by about two-and-a-half days for the country.

Other works are progressing fast and the facility is expected to be ready by middle of 2007 at a cost of about Rs 333 crore.

All options are being pursued to import natural gas from Myanmar. India has been seeking implementation of 5 MMT Liquefied Natural Gas (LNG) contract signed in June 2005 at Tehran, at various levels. Iran made fresh LNG pricing proposals at a meeting between Indian Petroleum Minister and the Iranian Foreign Minster at a meeting in Delhi in November 2006.

India joined US and Japan, becoming only the third country, to carry out the specialised activity of drilling/coring for gas hydrates, an alternative and potentially exciting source of natural gas in India. The specialised drill ship 'JOIDES Resolution' along with scientists and equipments arrived in India from US for coring from April to August 06. DGH obtained the drill ship from US under the Integrated Ocean Drilling Programme (IODP), as this type of specialised services are not available commercially in the world.

Based on results of scientific studies on the gas hydrate cores, pilot test production is expected to be carried out in 2009-10.

The government enacted the Petroleum and Natural Gas Regulatory Board Act, 2006 (PNGRB Act, 2006). This Act envisages to set up a Petroleum Natural Gas Regulatory Board to regulate the refining, processing, storage, transportation distribution, marketing and sale of petroleum, petroleum products and natural gas excluding production of crude oil and natural gas.

It would be to protect the interests of consumers and entities engaged in specified activities relating to petroleum, petroleum products and natural gas and to ensure uninterrupted and adequate supply of petroleum, petroleum products and natural gas in all parts of the country and to promote competitive markets.

Necessary action for setting up the Board is under way.

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