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Feasibility of Salt Cavern-Based Strategic Oil Reserves in Rajasthan


Government-owned engineering consultancy firm Engineers India (EIL) studying the prospects and feasibility of salt cavern-based strategic oil reserves in Rajasthan to increase India’s strategic oil storage capacity.


GS I: Geography

Dimensions of the Article:

  1. Current Strategic Oil Storage Facilities
  2. Salt Cavern-Based Reserves
  3. Potential in India for Storing Crude and Petroleum Products
  4. Strategic Petroleum Reserves Program: Progress So Far

Current Strategic Oil Storage Facilities

  • Existing strategic oil storage facilities in India:
    • Mangaluru and Padur in Karnataka
    • Visakhapatnam in Andhra Pradesh
  • These facilities are made up of excavated rock caverns
Importance of Strategic Crude Oil Reserves
  • Countries build strategic crude oil reserves to mitigate major supply disruptions in the global supply chain
  • India, as the world’s third-largest consumer of crude, depends on imports for over 85% of its requirement
  • Strategic petroleum reserves (SPR) ensure energy security and availability during global supply shocks and emergencies
India’s Current SPR Capacity
  • India’s SPR capacity: 5.33 million tonnes, approximately 39 million barrels of crude
  • Can meet around 9.5 days of demand
  • Expansion plans: Cumulative 6.5 million tonnes at two locations:
    • Chandikhol in Odisha (4 million tonnes)
    • Padur (2.5 million tonnes)

Salt Cavern-Based Reserves

Development Process

  • Salt caverns: Developed through solution mining by pumping water into geological formations with large salt deposits to dissolve the salt
  • Rock caverns: Developed through excavation

Simplicity, Speed, and Cost

  • Salt caverns: Process of solution mining is simpler, faster, and less cost-intensive compared to excavated rock caverns

Sealing and Operational Efficiency

  • Salt cavern-based facilities: Naturally well-sealed and engineered for rapid injection and extraction of oil
  • More attractive option for oil storage compared to other geological formations (MIT report)

Impermeable Barrier and Surface Operation

  • Salt caverns: The salt lining inside the caverns has extremely low oil absorbency, creating a natural impermeable barrier against hydrocarbons
  • Salt cavern-based storages can be created and operated almost entirely from the surface, unlike rock caverns

Example: US Strategic Petroleum Reserve

  • Entire Strategic Petroleum Reserve (SPR) program in the United States based on salt cavern-based storage facilities
  • US Strategic Petroleum Reserve consists of four sites with deep underground storage caverns created in salt domes along the Gulf of Mexico coast in Texas and Louisiana
  • Cumulative capacity of the US strategic oil reserves: approximately 727 million barrels

Multiple Uses of Salt Caverns

  • Salt caverns used to store liquid fuels, natural gas, compressed air, and hydrogen in various parts of the world

Potential in India for Storing Crude and Petroleum Products

  • Rajasthan, with ample salt formations, considered conducive for salt cavern-based strategic storage facilities
  • Previous plans to build a strategic oil reserve in Bikaner did not materialize
  • EIL’s partnership with DEEP.KBB GmbH, a German company specializing in cavern storage and solution mining technology, bridges the technical know-how gap
  • Refinery in Barmer and existing crude pipelines in Rajasthan provide infrastructure for building strategic oil reserves
  • Specific site identification and project cost estimation still premature

Strategic Petroleum Reserves Program: Progress So Far

  • India’s strategic oil reserves aim to build emergency stockpiles similar to those of the US and Western allies after the 1970s oil crisis
  • Three existing rock cavern-based facilities built during the first phase
  • Crude oil released from reserves by an empowered committee during supply disruptions
  • International Energy Agency (IEA) recommends countries to hold emergency oil stockpiles providing 90 days of import protection
Storage Capacity in India
  • Apart from SPR, oil marketing companies (OMCs) have storage facilities for crude oil and petroleum products for 64.5 days
  • Combined storage can meet around 74 days of the country’s petroleum demand
Commercialization of Strategic Petroleum Reserves
  • India plans to commercialize its strategic petroleum reserves
  • Example: Abu Dhabi National Oil Company (ADNOC) stored 0.8 million tonnes of crude oil in the Mangaluru strategic reserve
  • Second phase of the program aims to develop strategic reserves through public-private partnerships, reducing government spending and exploiting commercial potential

-Source: Indian Express

December 2023