New Delhi, March 30: State-owned refiner Indian Oil Corporation is emerging as a frontrunner to set up a crude storage facility in Mauritius having a planned capacity of 140 million tonnes.
“It is a significant opportunity for us… we are looking at all the options,” a senior IOC official said.
Mauritius plans to set up the facility before exploring the option of building a refinery and has put out feelers to the Indian refiner.
Sources said the plans were at an initial stage and IOC had to undertake a comprehensive assessment before it took up the project that involved huge investment.
“Petroleum storage hubs will diversify the status of Mauritius as a regional gateway destination, extending beyond an investment or a financial hub,” KPMG said in a research note.
IOC is a dominant player in the island nation: it operates 19 retail stations, has a 24-million-tonne storage facility in capital Port Louis and has a 42 per cent share in the region’s aviation fuel business.
Officials said the facility would remove the uncertainties associated with crude availability. Further, Mauritius can become a sourcing point for the neighbouring islands that do not have large storage.
A storage unit will open up the possibility of a refinery. There is no refinery in the region, except one in Madagascar, which is non-functional, and South Africa that just barely meets the country’s requirement.
Since the storage facility involves huge investment and risk, the island nation wants the project to be a joint venture with IOC as the lead partner along with MRPL and Mauritius government owned State Trading Corporation.
India, too, is setting up such facilities and is looking at options to fill them up.
India, which depends on imports to meet 79 per cent of its crude oil needs, is building underground storages at Visakhapatnam in Andhra Pradesh and Mangalore and Padur in Karnataka to store about 5.33 million tonnes of crude oil to meet the country’s requirement for 13-14 days.
The Visakhapatnam facility can store 1.33 million tonnes in underground rock caverns.
The facility in Mangalore will have a capacity of 1.55 million tonnes, while the Padur unit will be able to store another 2.5 million tonnes.