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India's MRPL likely to store Saudi crude after taking SPR on lease

India's state-run Mangalore Refinery and Petrochemicals Ltd is looking to use the 750,000 mt capacity that it is set to take on lease at the national strategic petroleum reserves facility in Mangalore to store crude oil from Saudi Arabia or any other similar grade, according to a top oil ministry official, speaking on the sidelines of the India Energy Forum by CERAWeek.

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"MRPL wants to empty the space at Mangalore SPR by December in order to be able to store crude from January onwards in the emptied space," said H.P.S. Ahuja, CEO of Indian Strategic Petroleum Reserves Ltd (ISPRL).

MRPL has already emptied 300,000 mt of Upper Zakum crude, stored at the Mangalore cavern in south India, with the remaining 450,000 mt of crude set to be taken out by year-end, Ahuja said.

Abu Dhabi National Oil Company (ADNOC) continues to utilize the remaining 750,000 mt capacity at Mangalore in which it has stored Das grade crude.

In its first phase of its SPR process, India set up national storage facilities at three locations with a combined capacity of 5.33 million mt. In addition to the 1.5 million mt capacity storage at Mangalore, there is a 1.33 million mt facility at Visakhapatnam and 2.5 million mt at Padur in Karnataka. All three facilities have already been commissioned.

In the second phase, India is augmenting storage capacity further by creating additional 6.5 million mt of SPRs at two locations: 4 million mt at Chandikhol in Odisha and another 2.5 million mt at Padur. It will be set up on a public-private partnership model.

The first phase, which is now fully filled, can cater for almost 9.5 days of India's crude oil requirements. The second phase will add another 12 days of capacity.

ISPRL is also in the process of inviting bids for the construction of caverns for the second phase of the SPR program.

"We will soon float a tender for the second phase," Ahuja said.

Earlier this year, India's oil ministry liberalized its policy by allowing ISPRL to commercialize up to 50% of its reserves -- under which ISPRL can use 20% of the volumes for trading and lease out the rest 30% of the storage capacity.

Separately, HPCL plans to store at least 300,000 mt Iraqi grades at Vizag strategic reserve, said HPCL Chairman Mukesh Kumar Surana.