Economy

India to join select band of nations to store crude oil

M Ramesh Chennai | Updated on July 25, 2014




Deep inside the earth under the hills of Visakhapatnam, tunnels 7-km long, as all as a 10-storey building and as wide as twelve Mercedes cars, are all set to fill themselves with a smelly, sticky guest – crude oil.

It is in this huge dug-out, large and safe from the wickedest missiles, India will hold 1.3 million tonnes of crude oil as a ‘strategic reserve’. Some on-ground finishing works and testing remain, and then the caverns will get their first crude – likely by the end of the year.

To create the caverns, 7.8 million cubic metres of rock, weighing 21.5 million tonnes had to be scooped out of the earth, says Rajan Pillai, CEO and Managing Director of Indian Strategic Petroleum Reserves Ltd, a wholly-owned subsidiary of Oil Industry Development Board. The debris lies as mountains, merging with the local landscape. The mouths of the tunnels have just been sealed – with concrete plugs three metres thick. Water, carefully let into the rocks around the tunnel at high pressure, will prevent the crude from seeping out – a method called ‘hydraulic confinement’.

Visakhapatnam is one of the three strategic reserve caverns being created by Indian Strategic Petroleum Reserves Ltd. The other two – at Mangalore (1.5 million tonnes) and Padur (2.5 m t), both on the western coast of Karnataka – are also nearing completion, waiting only for the pipeline connection from the nearest ports. In all, the three projects cost about ₹4,000 crore.

While India is not the first country to build underground caverns to store crude oil, it is in the company of a select few – the US, Japan, China, Korea and the Scandinavian countries.

It is fascinating to imagine huge caverns deep below as a defence against attacks, but the truth is that they are also the cheapest way of storing petroleum products. “You don’t require large swathes of land, giant metal tanks and a lot of security, there is much less evaporation and, since the caverns are built much below the sea level, it is easy to discharge crude into them from ships,” says AK Naithani of the National Institute of Rock Mechanics, Kolar, Karnataka.

In Visakhapatnam, the top of the tunnels are 30 metres below the mean sea level, which could be a hundred metres below the ground.

The three storage facilities can hold 13 days’ stock of the country’s needs. The International Energy Agency recommends 90 days. Even counting the petroleum stock of the refineries and in transit, inventory would be far short of IEA’s recommendations, says Pillai.

There is need to build more. There is a Phase-II in the works, which seeks to create 12.5 million tonnes of storage capacity, at Padur, Chandikhol (Odisha), Bikaner (Rajasthan) and Rajkot (Gujarat). Chandikhol is likely to be underground concrete tanks. Bikaner is likely to be the cheapest to build. The region has mountains of salt underground. Pump in water, dissolve the salt, drain the water out and what have you? A cavern.

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Published on July 25, 2014
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