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Oil reserves in salt caverns

GS Paper 3

Syllabus: Economy

 

Source: IE

Context: Government-owned engineering consultancy firm Engineers India (EIL) is studying the prospects and feasibility of developing salt cavern-based strategic oil reserves in Rajasthan.

  • This is in line with the government’s objective of increasing the country’s strategic oil storage capacity.

The country’s three existing strategic oil storage facilities — at Mangaluru and Padur in Karnataka, and Visakhapatnam in Andhra Pradesh — are made up of excavated rock caverns.

  

About Strategic Oil Reserves:

  • A strategic oil reserve refers to a stockpile of crude oil or petroleum products that a country maintains as a strategic measure to ensure energy security and stability in times of emergencies or disruptions in oil supply.
  • The International Energy Agency (IEA) recommends that all countries maintain emergency oil stockpiles equivalent to 90 days of import protection.

 

Statistics about Oil Reserves In India:

  • India, the world’s third-largest consumer of crude, depends on imports for more than 85% of its requirement.
  • India currently has an SPR capacity of 5.33 million tonnes or around 39 million barrels of crude. India’s strategic petroleum reserves (SPR) currently provide around 9.5 days of oil requirement coverage.
  • Additionally, oil marketing companies in India have their storage facilities, providing an additional 64.5 days of storage, totalling approximately 74 days of petroleum demand coverage.
  • India’s strategic crude oil storages are currently located at Visakhapatnam (Andhra Pradesh), Mangaluru (Karnataka), Padur (Karnataka) and Chandikhol in Odisha.
  • The construction of the Strategic Crude Oil Storage facilitiesin India is being managed by Indian Strategic Petroleum Reserves Limited (ISPRL) (a wholly owned subsidiary of Oil Industry Development Board (OIDB) under the Ministry of Petroleum & Natural Gas).

 

Underground storage

It is, by far the most economical method of storing petroleum products because the underground facility rules out the requirement of large swathes of land, ensures less evaporation and, since the caverns are built much below the sea level, it is easy to discharge crude into them from ships.

 

Two types of underground reserves:

 Salt Cavern-Based ReservesRock Cavern-Based Reserves
Development ProcessDeveloped through solution mining, involving the dissolution of salt depositsDeveloped through excavation
Cost and TimeSimpler, faster, and less cost-intensiveMore complex, time-consuming, and expensive
Sealing and AccessibilityNaturally well-sealed and engineered for rapid injection and extractionMay require additional sealing measures and access points
Oil AbsorbencyExtremely low oil absorbency, creating a natural impermeable barrierAbsorbency varies depending on the rock type
OperationCan be created and operated almost entirely from the surfaceRequires excavation and underground operations
ExamplesUS Strategic Petroleum Reserve (SPR) consists of salt cavern-based storage facilitiesMangaluru and Padur in Karnataka, and Visakhapatnam in Andhra Pradesh
UsagePrimarily used for oil storage, but also suitable for liquid fuels, natural gas, compressed air, and hydrogenPrimarily used for oil storage

Insta Links:

Strategic petroleum reserves (SPR) programme