The new stockpiles will cover about two months of LNG demand, and around six weeks of LPG use
India is planning to expand its strategic petroleum reserves beyond crude oil, building storage facilities for liquefied petroleum gas (LPG) and liquefied natural gas (LNG) at a total cost of $42 billion, Reuters has reported citing sources.
The new stockpiles, when full, will cover about two months of crude and LNG demand, and around six weeks of LPG use. The plan to build and fully stock the reserves will take about 10 years.
India imports about half of its LNG requirements and about 60% of its LPG needs, most of it from the Mideast.
LPG is primarily used for cooking, and recent disruptions in energy supplies due to the conflict in the Middle East triggered a minor panic among household users before the government managed to reassure them and stabilize the situation.
The disruptions in the Strait of Hormuz, through which a fifth of the world’s energy passed before the US-Israeli attack on Iran, exposed India’s energy supply vulnerabilities.
In June, New Delhi directed the state-run Oil and Natural Gas Corporation to build and fill another strategic petroleum reserve facility, which would expand its reserve capacity by a third.
India’s core strategic reserves hold enough oil for only about 5-10 days of consumption. China’s reserves, at more than 220 million barrels, can last 60 days, while Japan’s 324 million barrel-reserve can last 230 days.
The US has steadily released oil from its reserves recently as oil prices climbed, but still has about 37 days of stocks.
The Indian government is considering additional levies for LNG and LPG consumers to finance the construction of the gas reserves, the report said. It will continue to fund the strategic crude reserves buildup. But Prime Minister Narendra Modi has yet to approve the levy plan as it would be politically sensitive in a high inflation and high costs environment.
