Mumbai: The UAE and India are working together to finalise the terms of an agreement on strategic crude oil storage in the southern Indian city of Mangalore, the UAE Minister of Energy told Gulf News.

“We are working with the Indian side on the final terms of this agreement to sign the Memorandum of understanding on the strategic reserve. Once we agree on those terms we will move forward to the next stage of the project, but in general this concept is very welcome,” Suhail Mohammad Al Mazrouei said in an interview. His comments came as His Highness Shaikh Mohammad Bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces, ended his three-day visit to India on Friday.

On the first day of his visit, both nations announced that the Abu Dhabi National Oil Company (Adnoc) had successfully partnered the Indian Strategic Petroleum Reserve Limited (ISPRL) to store crude at India’s soon-to-be completed strategic oil reserve project in the state of Karnataka. When completed, the facility in Mangalore will have a capacity of 1.5 million metric tonnes (MMT).

“India is a very important market for us and for our oil companies. The Adnoc team had been discussing for some time the possibility of building such strategic reserves, similar in the model to both Japan and Korea. Once we agree on the final terms, we will move forward to the next stage of the project,” Al Mazrouei said. The UAE currently pursues two strategic petroleum reserves (SPRs) in Japan and South Korea.

India imports nearly 80 per cent of its crude oil and is constructing vast underground storages in Andhra Pradesh and Karnataka states to store more than 5.30 million metric tonnes (MMT) of crude for emergencies. Dharmendra Pradhan, the Indian Minister of State for Petroleum and Natural Gas, had said on Wednesday that certain taxation, VAT and revenue related issues with regards to the Mangalore strategic reserve were being dealt with on an urgent basis by both India and the UAE.

On the potential of growth in the bilateral energy sector, Al Mazrouei said: “India is a very large energy market — there are abundant opportunities from power generation to renewables, refineries and petrochemicals. We had a very good meeting with my counterpart [Pradhan] — India proposed several projects that we have promised to look into seriuosuly and evaluate with them.”

At the same time, Al Mazrouei said, the UAE was offering Indian companies several investment opportunities. “We are an open market and there’s a lot of scope for projects in construction as EPC contracts, and for energy companies in the form of IPP. Indian companies are already bidding in the renewable energy sector. We also have in the UAE companies such as Masdar, which participates in large renewable projects internationally. They will also be keen to explore projects in India within the renewables and solar energy sector,” he said.