Abu Dhabi to ramp up crude storage, India’s reserve may go up 70%

NEW DELHI: India’s crude security is all set to get a boost with its reserve likely to increase by nearly 70% from 5.3 million tonnes, as the UAE’s Abu Dhabi National Oil Company (ADNOC) has agreed to ramp up crude oil storage to as much as 30 million barrels.Officials said the UAE already has leased storage capacity at Mangalore in India, where it keeps nearly 6 million barrels, or around eight lakh tonnes, of crude. Ramping up the storage to 30 million barrels will add over four million tonnes of crude to India’s overall strategic reserves.India currently has a strategic petroleum reserve of 5.3 million tonnes (MT) at Visakhapatnam, Mangalore and Padur, which equals around 38 million barrels.Under Phase II, govt in July 2021 approved the establishment of two additional commercial-cum-strategic reserves with a capacity of 6.5 MT at Chandikhol in Odisha and Padur under the PPP mode. India is also looking at creating a 20-30 days of strategic reserve for LPG.The Abu Dhabi-based energy giant’s agreement with Indian Strategic Petroleum Reserves Limited comes at a time when India faces disruption in energy supplies amid the West Asia war. The two countries have also signed agreements exploring LNG and LPG storage possibilities in India, besides crude storage in Fujairah as part of India’s strategic petroleum reserve. The UAE is among the top five suppliers of crude to India, besides having long-term contracts for LPG and natural gas.The UAE recently announced its exit from Opec and plans to ramp up production without being constrained by quotas. While the UAE currently produces about 3-3.2 mbd of crude, it plans to increase output to 5 mbd by 2027 and monetise its reserves.ADNOC has also signed an agreement with Indian Oil Corporation to expand LPG supply and trading opportunities for the widely used cooking gas in India. Officials said the deal will be an extension of an existing LPG term contract signed between the two energy companies in 2023 and is likely to support a long-term LPG sale and purchase agreement.