MoU underscores strategic partnership
The MoU was signed by Abdulla Salem Al Dhaheri, Director of Marketing, Sales and Trading at ADNOC and HPS Ahuja CEO and MD ISPRL on the sidelines of the Abu Dhabi International Petroleum Exhibition and Conference (ADIPEC) on 12 Nov 2018.
The Abu Dhabi National Oil Company (ADNOC) is exploring the possibility of storing crude oil in India’s cavern at Padur in Karnataka.
A Memorandum of Understanding (MoU) was signed with the Indian Strategic Petroleum Reserves Ltd (ISPRL) to explore the possibility of storing ADNOC crude oil at Padur, which has a 2.5 million tonne (~17 million barrels) capacity. ADNOC could store crude in two compartments at the facility.
Following the MoU signing on 12 Nov 2018, Dr Sultan Ahmed Al Jaber, UAE Minister of State and ADNOC Group CEO, has underlined the importance of the Indian energy market
Dr Al Jaber said: “India is an important oil market and this agreement underscores the strategic energy partnership between the UAE and India that leverages the UAE and ADNOC’s expertise and oil resources.
“It is our firm hope that we will be able to convert this framework agreement into a new mutually beneficial partnership that will create opportunities for ADNOC to increase deliveries of high-quality crude oil to India’s expanding energy market and helping India meet its growing energy demand and safeguard its energy security.”
ADNOC is the only foreign oil and gas company, so far, to invest by way of crude oil in India’s strategic petroleum reserves program.
It is also a stakeholder, along with Saudi Aramco, and a consortium of Indian state-run companies, in one of India’s largest refinery and petrochemicals complexes, to be constructed at Ratnagiri in Maharashtra.
Following the MoU,
The MoU with ISPRL, an Indian government-owned company mandated to store crude oil for emergency needs, follows the arrival, on November 4, of the final shipment of the initial delivery of ADNOC crude to be stored in another ISPRL underground facility at Mangalore, also in Karnataka, which will store 5.86 million barrels of ADNOC crude oil.
Dr Sultan Ahmed Al Jaber, UAE Minister of State and ADNOC Group CEO, has underlined the importance of the Indian energy market
Dr Al Jaber said: “India is an important oil market and this agreement underscores the strategic energy partnership between the UAE and India that leverages the UAE and ADNOC’s expertise and oil resources.
“It is our firm hope that we will be able to convert this framework agreement into a new mutually beneficial partnership that will create opportunities for ADNOC to increase deliveries of high-quality crude oil to India’s expanding energy market and helping India meet its growing energy demand and safeguard its energy security.”
ADNOC is the only foreign oil and gas company, so far, to invest by way of crude oil in India’s strategic petroleum reserves program.
It is also a stakeholder, along with Saudi Aramco, and a consortium of Indian state-run companies, in one of India’s largest refinery and petrochemicals complexes, to be constructed at Ratnagiri in Maharashtra.
Dharmendra Pradhan, Minister of Petroleum and Natural Gas, elaborated: “This MoU will allow ISPRL to explore, with ADNOC, opportunities related to the possible storage of ADNOC crude at Padur, which would help to significantly strengthen the country’s strategic petroleum reserves. This agreement reflects the strong bonds of cooperation between India and the UAE and provides a foundation for strengthening and expanding our strategic energy relationship.”
In addition to ADNOC’s stake in the Ratnagiri refinery, the hydrocarbon linkages between the UAE and India were bolstered in February 2018 when an Indian consortium of three companies, comprising ONGC Videsh, Indian Oil Company and Bharat PetroResources Ltd was awarded a 10% participating interest in Abu Dhabi’s offshore Lower Zakum concession.
ISPRL has already built 5.33 million tonnes of underground storage capacity at three locations, Visakhapatnam (1.33 million tonnes), Mangalore (1.5 million tonnes) and Padur (2.5 million tonnes), that can meet around 10 days of the country’s oil needs. The government of India, in June 2018, announced the creation of two new reserves, a 4 million tonnes storage facility at Chandikhol, in the eastern state of Odisha, and an additional 2.5 million-tonne facility at Padur.
Combined, the existing and newly announced facilities will provide around 22 days of emergency coverage for India’s crude oil requirements.
Indian energy demand is forecast, by the International Energy Agency (IEA), to grow by more than any other country in the period to 2040, propelled by an economy that will grow to more than five-times its current size and by population growth that will make it the world’s most populous country. Indian energy consumption is expected to grow more than double by 2040, accounting for 25% of the rise in global energy demand, and the largest absolute growth in oil consumption.
India imports over 82% of its crude oil needs, around eight per cent of which is supplied by the UAE. In addition to helping to ensure energy security, participation in the Indian oil storage facilities will enable ADNOC to efficiently and competitively meet Indian market demand. fiinews.com
