MRPL partners ISPRL for cost-effective crude oil storage facility

New Delhi: Mangalore Refinery and Petrochemicals Ltd (MRPL) has entered into a strategic deal to store its crude oil in the caverns of the Indian Strategic Petroleum Reserves Ltd (ISPRL).

“This partnership enables MRPL to leverage storage capacity from ISPRL’s caverns, marking a significant milestone for both the organizations,” MRPL said in a statement on Tuesday.

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The agreement was signed on Tuesday by B. Sudharshan, executive director (refinery) MRPL, and Atul Gupta, deputy chief executive officer, ISPRL.

ISPRL, a fully-owned subsidiary of Oil Industry Development Board under the ministry of petroleum and natural gas, is responsible for maintaining the country’s strategic petroleum reserves by storing them in underground rock caverns.

Mundkur Shyamprasad Kamath, managing director of MRPL, said that the agreement would enable the company to enhance its crude oil storage capacity, thereby mitigating risks associated with the volatility of global crude oil markets.

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“This agreement is not merely a contract but a shared commitment to excellence and a promising future,” he said.

MRPL is a subsidiary of state-run Oil and Natural Gas Corporation Ltd.

Reduces costs

The company said that leasing ISPRL’s caverns eliminates the need for constructing and maintaining standalone storage facilities, thereby reducing costs.

Further, the proximity of ISPRL caverns to MRPL’s refinery and the coast minimizes transportation costs and transit time.

“Storing diverse grades of crude oil as per MRPL’s requirements provides operational adaptability,” it said.

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With this strategic advantage, MRPL is poised to leverage the added storage capacity to procure economically viable and complex crude grades, boosting its bottom line while ensuring energy resilience, according to the statement.

ISPRL, the custodian of caverns storing critical sovereign crude oil reserves, also operates facilities for any other entity approved by the Centre and leases out storage capacities. It also coordinates for releasing and replenishing strategic crude oil stock during supply disruptions through an empowered committee of the Government of India.

In the first phase, ISPRL created underground rock caverns to store 5.33 million tonnes of crude across three locations: Visakhapatnam, Andhra Pradesh (1.33 million tonnes), and Mangalore (1.5 million tonnes) and Padur (2.5 million tonnes) in Karnataka.

Shares of MRPL on the BSE closed 0.5% higher at ₹144.50 apiece on Tuesday.