India-UAE signed 114 strategic agreements worth Rs78 trillion with the Gulf OPEC on Wednesday that allowed the Gulf OPEC country to fill half of an underground crude oil storing facility at Mangalore that is part of New Delhi’s strategic reserve system.
New Delhi proclaimed a series of deals with the UAE extending from defence, trade and maritime cooperation to energy after a consultation between Prime Minister Narendra Modi and Abu Dhabi’s Crown Prince Sheikh Mohamed bin Zayed al-Nahyan.
UAE’s Abu Dhabi National Oil Company (ADNOC) will stock about 6 million barrels of oil at Mangalore, taking up about half of the site’s volume, said Sunjay Sudhir, joint secretary for international cooperation at the Indian oil ministry.
India, evading against energy security risks as it imports most of its oil needs, is building backup storage in underground potholes to hold 36.87 million barrels of crude, or about 10 days of its usual daily oil demand in 2016. “This will help safeguard India’s energy security and permit us to meet the nation’s mounting demand for energy,” said Indian oil minister Dharmendra Pradhan.
As one of the fastest growing financial prudence in the world, India desires massive funds in some key sectors, predominantly infrastructure. UAE’s Abu Dhabi National Oil Company said the Mangalore oil storage facility is the third that it has access to in Asia after Japan and South Korea, permitting the company to be more modest in meeting market demand across southeast Asia.
“India is a significant energy market and this storage contract strengthens ADNOC´s part as one of the world’s most important and reliable suppliers of oil,” Sultan Ahmed Al Jaber, UAE Minister of State and ADNOC Group CEO said in a speech.
“We will use the Mangalore facility to not only figure on our existing business associations across India but also to discover new downstream openings for ADNOC’s increasing assortment of advanced and petrochemical products.” During Modi’s visit to the UAE in 2015, the two countries proclaimed a $75 billion joint infrastructure fund that would finance in India’s infrastructure expansion.
UAE is India’s fifth largest oil supplier. The crude supplies will start in the last quarter of this year, Sudhir said. “We are speaking to them (ADNOC) for two-three grades.”
India, the world’s third largest oil consumer, has also filled a Vizag storage site in southern Andhra Pradesh with 7.55 million barrels of Iraqi oil and has requested offers from suppliers to plug an 18.3-million-barrel facility at Padur in Karnataka. The crown prince of Abu Dhabi will be the guest of honor at India’s Republic Day parade on Thursday.