India eyes cheap oil for storage, more LPG from UAE
NEW DELHI: As the world runs out of space to store the flood of oil, petroleum minister Dharmendra Pradhan on Tuesday held a virtual meeting with his UAE counterpart Sultan Al Jaber to discuss the possibility of tanking up India’s strategic petroleum storage capacity with crude from ADNOC (Abu Dhabi National Oil Company) to take advantage of the price crash.
UAE is India’s fourth-largest supplier of oil and a major source of LPG. ADNOC has an MoU for the leasing half of the Indian strategic reserve capacity of 2.5 million tonnes at Padur, built by ISPRL. Saudi Aramco is the other major producer that has an MoU for leasing a quarter of the Padur SPR. These companies can store their oil to cater to their strategic needs, while the rest can be sold to refiners. Producers are now hiring crude carriers to store oil as Saudi Arabia and Russia flood the market amid a sharp drop in global demand due to the economic impact of coronavirus pandemic.
Pradhan explained the situation in India that has led to state-run refiners deferring oil shipments.
