Hindustan Construction Company to build India's first strategic oil storage

15 January 2008

Mumbai: Hindustan Construction Compay (HCC) has emerged the lowest bidder for building the country's first strategic crude storage, sources close to the bidding process said.

The government had invited four of the 13 firms and consortia, both Indian and foreign, which expressed an interest in building the reserve to participate in a reverse bidding process, with the price ceiling fixed at around Rs460 crore.

HCC emerged the lowest bidder, quoting Rs375 crore, bagging the contract, official involved in considering the bids said. The contract is likely to be awarded this week, sources said

Patel Engineering Co and a joint venture involving South Korea's SK Engineering & Construction Co Ltd and Larsen & Toubro Ltd were also in the race.

India, Asia's No 3 oil consumer, proposes to store 9.75 million barrels of oil as strategic reserve by early 2011 as a first step, and may expand this to 36.65 million barrels, enough to meet 15 days' demand, later.

A announcement on the award of contract would, however, be made once the board of a state-run company set up to build the reserves, Indian Strategic Petroleum Reserves Ltd, approves the award, they said.