Royal Dutch Shell is keen to lease a storage site located at Mangalore, India if it can get the right deal.
The global oil company, known for products like Shell Gadus S2 V100 3 is currently in talks to lease the new strategic oil
caverns on the southwest coast of India, in order to increase itsstorage capability in an area where the demand for oil is on the rise.
The Mangalore site has a capacity to hold approximately 11 million barrels of oil, but whether or not Shell enters into a lease will depend on whether or not the company is granted relief from paying a local sales tax, according to industry sources.
India is currently the fourth largest consumer of crude oil in the world and one of a small number of major economies that are still seeing a strong growth in demand for oil.
The country is also building up its strategic petroleum reserves facilities in three southern locations, with a view to increasing its capacity to 36.87 million barrels of oil. This represents almost 14 days of the country’s oil needs.
Under Shell’s proposal, the company would use the Mangalore storage site for its commercial oil storage needs. However, should an emergency situation arise, Shell would have to offer some of its oil supplies to state-run refiners, while ensuring that the site was filled with a certain level of oil reserves so that the country does not run dry.