Concession for oil inventory investors
The Private-Public Partnership is being promoted for the next phase of strategic petroleum reserves, a key initiative for India’s energy security.
Petroleum and Natural Gas Minister Dharmendra Pradhan said the government plan to develop US$1.6 billion Phase II SPR through PPP framework.
The Phase II was launched in Delhi on 17 Oct 2018.
The Phase-II SPR program entails creation of additional storage facilities of 6.5 MMT of crude oil to be stored in underground rock caverns at Chandikhol in Odisha and Padur in Karnataka with an envisaged investment outlay of Rs.11,000 Crores (US$ 1.6 billion).
The investment model seeks partnership through DBFOT (Design, Build, Finance, Operate and Transfer) and offers prospective concessionaire the rights on the crude oil inventory as per an agreed term where the Government will have the first right of refusal on the inventory in times of exigencies.
As a key takeaway the Concessionaire will have access to the large Indian refining market and multiple other revenue streams.
The Indian Strategic Petroleum Reserves Ltd (ISPRL), a Special Purpose Vehicle (SPV) created for the purpose of building the SPRs has successfully completed and commissioned the Phase I SPRs program.
ISPRL has completed and commissioned Phase I to store 10 days of crude oil reserves.
Indian refiners maintain 65 days of crude storage, and when added to the storage planned and achieved by ISPRL, takes the Indian crude storage tally to 87 days. This is very close to the storage of 90 days mandated by IEA for member countries. fiinews.com
