Salt cavern-based strategic oil reserves

Published: 8th Jun, 2023

Context

Recently, a Government-owned engineering consultancy firm Engineers India (EIL) is studying the prospects and feasibility of developing salt cavern-based strategic oil reserves in Rajasthan, in line with the government’s objective of increasing the country’s strategic oil storage capacity.

India’s Strategic Oil reserves:

A strategic reserve is the reserve of a commodity or items that is held back from normal use by governments, in pursuance of a particular strategy or to cope with unexpected events.
Countries keep strategic reserves of crude oil to meet the immediate demand in ‘times of crisis’ or ‘unexpected events’.
India, the world’s third-largest consumer of crude, depends on imports for more than 85% of its requirement.
Government of India through Indian Strategic Petroleum Reserve Ltd. (ISPRL) under Phase–1 has setup Strategic Petroleum Reserves (SPR) at three locations with a capacity of 5.33 MMT (million metric ton) –
- Vishakhapatnam (1.33 MMT),
- Mangaluru (1.50 MMT) and
- Padur (2.5 MMT)

About Salt Cavern-based oil reserves:

Underground storage caverns are used to store very large quantities of unrefined petroleum and natural gas.
These underground caverns are cavities that have been “mined” out of naturally occurring salt domes.
Approximately 7% of total underground natural gas storage capacity is in Salt Caverns.
Salt caverns are developed by the process of solution mining, which involves pumping water into geological formations with large salt deposits to dissolve the salt.

Salt Cavern-based Storage v/s Rock Cavern-based Storage:

Rock caverns are large man-made spaces in the rock and are considered the safest means of storing hydrocarbons.
In comparison to rock caverns, salt caverns are considered cheaper and less labour- and cost-intensive.
Salt cavern-based oil storage facilities are also naturally well-sealed, and engineered for rapid injection and extraction of oil.
This makes them a more attractive option than storing oil in other geological formations.
The entire strategic petroleum reserve programme of the United States has so far been based on salt cavern-based storage facilities.
In comparison, India’s all 3 strategic petroleum reserves are made up of excavated rock caverns.

India’s Potential:

Rajasthan, which has the bulk of requisite salt formations in India, is seen as the most conducive for developing salt cavern-based strategic storage facilities.
A refinery is coming up in Barmer, and Rajasthan has crude pipelines as well; such infrastructure is conducive for building strategic oil reserves.
However, no Indian company, including EIL, had the requisite technical know-how to build salt cavern-based strategic hydrocarbon storage.
This gap in access to technology has been bridged by EIL’s recent partnership with Germany’s DEEP.

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Salt cavern-based strategic oil reserves