Even as energy security has become more crucial, especially, with international oil markets witnessing extreme price volatility, India’s critical programme to set up strategic petroleum reserves (SPRs) for storing crude oil has been languishing for almost two years as States have failed to allot land.

The parliamentary standing committee on petroleum and natural gas expressed concern over the delay in the government’s Phase II of the SPR programme for establishing reserves at Chandikhol in Odisha of 4 million tonnes (mt) and at Padur II in Karnataka of 2.5 mt. The Union Cabinet approved the proposal on July 8, 2021.

The committee pointed out that there have been “inordinate delays” in land acquisitions on both projects in Odisha and Karnataka, and the progress seems to be “minimal”.

Inordinate delays

“Taking note of the fact that the SPRs are projects of national importance to enhance energy security of the country, the committee, therefore, desires the Ministry of Petroleum and Natural Gas (MoPNG) to take up the issue of land acquisition at the highest level in coordination with the two State governments, keeping in view the interests of all stakeholders,” the panel added.

The committee met with officials from the MoPNG in the middle of February this year. It presented the report in Parliament on Wednesday.

SPR Phase II

Indian Strategic Petroleum Reserve (ISPRL) had applied for land allocation of 400 acres for the Chandikhol project with Odisha in September 2019, while it applied for 210 acres of land for the Padur project with the Karnataka government in November 2020.

When the panel inquired about the current status of the two projects from the MoPNG officials, they responded that the land allocation approval is under process with the respective State governments and the demand for anticipated payment for the allocation of land from the State has not been raised.

“Government of Odisha is evaluating the application for land allotment for the Chandikhol project. The approval from Odisha for allotment is presently awaited,” the ministry told the committee.

“For the Padur project, ISPRL submitted a requirement for acquiring 210 acres of land to the Karnataka Industrial Areas Development Board (KIADB). Preliminary gazette notification has been done by KIADB. A resettlement and rehabilitation (R&R) committee has been formed, and compensation rates are to be decided by District Collector Udupi,” it added.

Suggestions

“Taking note of the fact that the SPRs are projects of national importance to enhance the energy security of the country, the committee, therefore, desires the ministry to take up the issue of land acquisition at the highest level in coordination with the two State governments, keeping in mind the interests of all stakeholders,” the panel recommended.

It suggested that the projects be taken to their logical conclusion in a time-bound manner and also desired that MoPNG explore the possibility of building more SPRs across the country, particularly mini or small caverns wherever geological conditions are favourable, it added.

“The committee further desires that the Ministry should also explore the option of giving responsibility to OMCs and refineries to operate and maintain SPR caverns while the Ministry bears the capital cost for construction,” it added.

Related Topics