An Adnoc petrol station in Sharjah [Illustrative image only] Image Credit: Ahmed Ramzan/Gulf News

Abu Dhabi: Abu Dhabi National Oil Company (Adnoc) on Monday signed a Memorandum of Understanding with the Indian Strategic Petroleum Reserves Ltd (ISPRL) to explore the possibility of storing its crude oil at ISPRL’s underground oil storage facility at Padur in Karnataka.

The facility has a storage capacity of 2.5 million-tonnes (17 million barrels) capacity, according to a statement from Adnoc.

The agreement follows the arrival, on November 4, of the final shipment of the initial delivery of Adnoc crude to be stored in another ISPRL underground facility in Mangalore which will store 5.86 million barrels of crude oil.

“It is our firm hope that we will be able to convert this framework agreement into a new mutually beneficial partnership that will create opportunities for Adnoc to increase deliveries of high-quality crude oil to India’s expanding energy market and help India meet its growing energy demand and safeguard its energy security,” said Dr Sultan Ahmad Al Jaber, UAE Minister of State and Group CEO of Adnoc,

Adnoc is the only foreign oil company, so far, to invest, by way of crude oil in India’s strategic petroleum reserves programme. It is also a stakeholder, along with Saudi Aramco, and a consortium of Indian state-run companies, in one of India’s largest refinery and petrochemicals complexes to be constructed at Ratnagiri in Maharashtra.

In addition to Adnoc’s stake in the Ratnagiri refinery, the energy cooperation between the UAE and India were bolstered in February 2018, when an Indian consortium of three companies, comprising ONGC Videsh, Indian Oil Company and Bharat Petro Resources Ltd, was awarded a 10 per cent participating interest in Abu Dhabi’s offshore Lower Zakum concession.

India has already built 5.33 million tonnes of underground storage capacity at three locations, Visakhapatnam (1.33 million tonnes), Mangalore (1.5 million tonnes) and Padur (2.5 million tonnes), that can meet around 10 days of the country’s oil needs.

The government of India, in June 2018, announced the creation of two new reserves, a 4-million-tonnes storage facility at Chandikhol, in the eastern state of Odisha, and an additional 2.5-million-tonnes facility at Padur.

India is also in talks with Saudi Arabia to store crude oil in Padur facility, Indian oil minister Dharmendra Pradhan told reporters in Abu Dhabi.

Indian energy consumption is expected to more than double by 2040 accounting for 25 per cent of the rise in global energy demand, and the largest absolute growth in oil consumption.

India is over 82 per cent dependent on imports to meet its crude oil needs, around eight per cent of which is supplied by the UAE.