Bids Invited for New Commercial Crude Oil Strategic Storage

SEATTLE (Oil Monster): India announced plans to construct its first commercial crude oil strategic storage. The bids are due by 22nd April, with tender expected to be awarded by 27th June, 2024.

The Indian Strategic Petroleum Reserves Ltd (ISPRL) has invited bids for constructing 2.5 million tonnes of underground storage at Padur in Karnataka State. It plans to acquire about 215 acres of land for the project.

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In the first phase, ISPRL had built a strategic petroleum reserve for storage of 5.33 million tonnes of crude oil at three locations Visakhapatnam (1.33 million tonnes) in Andhra Pradesh and Mangalore (1.5 million tonnes) and Padur (2.5 million tonnes). These were built using government funds.

As per tender documents, the proposed underground commercial cum strategic petroleum reserve will have associated above ground facilities, including dedicated SPM and associated pipelines. It will be constructed in a public-private partnership (PPP) model.

The bidders are required to mention the premium they wish to pay to the authority or a financial grant that they require to build the facility. The entity that offers the highest premium will be awarded the project. In case of no bidder offering premium, the project would be awarded to the entity that seeks the lowest grant. The maximum grant that can be quoted for the project is being capped to INR 3,308 crore.