India gets first Iranian oil parcel for strategic reserves

India has received the first parcel of Iranian oil to be pumped into the Mangalore cavern of the country's strategic storage facility in southern India, Mangalore Refinery and Petrochemicals Ltd, which imported the very large crude carrier (VLCC), said on its website.

The first parcel of 2,60,000 tonnes of Iran mix crude oil for the Indian Strategic Petroleum Reserves Ltd (ISPRL), shipped in by the Very Large Crude Carrier (VLCC) MT Dino, is being pumped into the Mangalore cavern for testing the facilities.

India will fill half of the storage with 6 million barrels of Iranian oil while continuing talks with United Arab Emirates and Saudi Arabia for the remainder.

A second parcel to be procured by Bharat Petroleum Corp. is scheduled to arrive around 25 October, reports quoting sources with direct knowledge of the matter said.

India, which is heavily dependent on imports for its petroleum requirements, importing about 80 per cent of its annual requirements, is seeking to hedge against energy security risks by building emergency storage in vast underground caverns at three locations in southern India.

The government has set up 5.33 million metric tonnes of strategic crude oil storages at  Vishakhapatnam, Mangalore and Padur (near Udupi). These strategic storages would serve as a cushion during any external supply disruptions.

The strategic crude oil storage facilities are being managed by Indian Strategic Petroleum Reserves Limited (ISPRL), a special purpose vehicle, which is a wholly-owned subsidiary of Oil Industry Development Board (OIDB) under the ministry of petroleum and natural gas.

The Vishakhapatnam facility with 1.33 MMT capacity has already been commissioned in June 2015.

Mangalore facility with capacity of 1.5 MMT started receiving crude on Wednesday for testing the facility. Padur facility with 2.5 MMT capacity is expected to be ready by the end of this year.

Meanwhile, India's purchases of Iranian oil fell 4.1 per cent in September, slipping from August when imports from Tehran hit their highest in at least 15 years, according to ship tracking data and a report compiled by Thomson Reuters Oil Research and Forecasts.