New Delhi, Feb 12 Abu Dhabi National Oil Company (ADNOC) has signed an agreement to store about 6 million barrels of crude oil at India's maiden strategic oil reserve.
The agreement to store crude oil at the Mangalore underground caverns was signed on Saturday during the visit of Prime Minister Narendra Modi to Abu Dhabi, a statement issued by Indian Strategic Petroleum Reserves Ltd (ISPRL) said.
The pact, which was signed by HPS Ahuja, CEO & MD, ISPRL and Abdulla Salem Al Dhaheri, Director Marketing, Sales and Trading, ADNOC, envisages storage of 5.86 million barrels of crude by the UAE firm in the underground storage cavern.
ADNOC had last year given up its crude storage lease in South Korea and instead agreed to store oil at Mangalore in a bid to establish ground presence in world's third largest oil consuming nation.
Out of the crude stored, a part would be used for commercial purposes by ADNOC, while a major part would be purely for strategic purposes.
ISPRL has built around 39 million barrels (5.33 million tonnes) of strategic crude oil storage at three locations -- Padur and Mangalore on the western coast and Visakhapatnam on the eastern coast.
The oil stored in the underground rock caverns at the three locations are to be used in an emergency.
The Strategic Petroleum Reserves (SPR) at Mangalore consists of two compartments with a total storage capacity of 1.5 million tonnes (11 million barrels), the statement said.
While one compartment has been filled with crude oil through funds made available by the government, the other compartment will be filled by crude supplied by ADNOC, the statement said.
"The oil storage facility will help boost India's energy security, as well as enable ADNOC to efficiently and competitively meet market demand in India and across the fast-developing southeast Asian economies." it added.
India imports over 80 per cent of its crude oil needs, out of which about 8 per cent is supplied by the UAE.
ADNOC hired the Mangalore storage just as it ended a contract to store 6 million barrels of crude oil at Korea National Oil Corp's Yeosu facility in the country's southwest coast.
South Korea had first right over the oil in the event of a supply emergency.
While the Vishakhapatnam storage of ISPRL has a capacity of 1.33 million tonnes (9.77 million barrels) of crude oil, Padur can stock 2.5 million tonnes (18.37 million barrels).
Disclaimer :- This story has not been edited by Outlook staff and is auto-generated from news agency feeds.