The hilly rocky geology of India’s arid north-western state provides for natural caverns to be carved out to store petroleum crude and products.

While the idea of storing oil in man-made caverns has been around for decades, India does not have the technology to extract the salts embedded in the rocks to eliminate the risk of contamination. At the same time, engineers must ensure the geology of the caverns are stabilised after the salts are removed.

EIL announced its intention to build the oil storage cavern in landlocked Rajasthan after recently signing a memorandum of agreement with German engineering firm DEEP.KBB.

In a joint statement, the companies announced:

“The alliance shall jointly pursue basic design, detail engineering, project management and construction supervision services for underground and above ground salt cavern storage facilities for hydrocarbons and other products like hydrogen and carbon dioxide.”

The agreement was signed by EIL’s commercial director, Atul Gupta, and DEEP.KBB’s CEO, Christian Hellberg, and CFO Stefan Möller in New Delhi. The ceremony was witnessed by India’s petroleum secretary Pankaj Jain and EIL chair and managing director Vartika Shukla.

DEEP.KBB’s expertise is in building deep underground oil storage tanks and extracting brine and salt from rock formations.

EIL is currently working on two terminals for storing liquefied petroleum gas (LPG) for Hindustan Petroleum.

Rajasthan will need storage terminals to serve the new integrated Barmer refinery-petrochemical complex that is due for completion next year. Jointly owned by Hindustan Petroleum Corporation Limited and the Rajasthan state government, it has the annual capacities to refine nine million tonnes of crude and produce two million tonnes petrochemical products.

India’s existing three state-owned storage terminals are all granite rock caverns located near the seaports of Mangalore in the western state of Karnataka, Padur in the eastern state of Tamil Nadu, and Visakhapatnam in eastern Andhra Pradesh.