India's First Private-Sector Strategic Petroleum Reserve
Megha Engineering & Infrastructures Ltd has been awarded the mandate to build and operate India’s first private-sector strategic petroleum reserve (SPR) at Padur in Karnataka.
Key Features and Financials
- It involves the construction of a 2.5 million metric tonnes (MMT) SPR over five years, with operational rights for 60 years.
- The project is valued at ₹5,700 crore.
Strategic Importance
- This reserve will augment India's current 5.33-MMT strategic stockpile, which covers only 8-9 days of crude demand.
- The existing SPRs in India are managed by Indian Strategic Petroleum Reserves Ltd (ISPRL) and are located in Visakhapatnam, Mangaluru, and Padur.
Bid and Funding Details
- The bid was organized by ISPRL, focusing on the viability gap funding (VGF) requested by bidders.
International Context
- India's existing SPR capacity of 39 million barrels is significantly lower than the US (727 million barrels) and China (over 1,200 million barrels).
Private Sector Participation
- Private participation in India's SPRs was initially proposed over a decade ago.
- The Union cabinet approved public-private partnership projects in Padur and Chandikhol in 2018.
