Hindustan Construction Building Strategic Oil Storage

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Researched by Industrial Info Resources (Sugar Land, Texas)--Indian Strategic Petroleum Reserves Limited (ISPRL) has awarded the Hindustan Construction Company (HCC) (Bombay, India) a $95 million contract to construct the country's first strategic crude oil storage terminal at the Port of Visakhapatnam, Andhra Pradesh.

The scope of the contract covers the construction of underground rock caverns for crude oil storage, including the detailed engineering and design, underground excavation, access tunnels, water curtain galleries, the main storage cavern, shafts and associated underground civil works including geological mapping. Construction on the project, with a storage capacity of 1.33 million tons per annum (TPA) (about 10 million barrels) is scheduled to last 36 months.

This project is one of three strategic crude oil storage facilities planned by ISPRL, a subsidiary of the Oil Industry Development Board. The total capacity of all three facilities will be 5 million tons (about 37.5 million barrels). The other selected sites are at the Port of Mangalore (1.5 million TPA) and another location near Mangalore (2.5 million TPA). When the projects were announced in 2006, it was said that the cost of filling the storage capacity would be based on the prevailing international prices of crude. On that basis, the 5 million-TPA reserve would cost $2.8 billion over nine years, including the cost of crude. No revision on this figure has been made available. The operational cost will be about $23 million per year.

HCC has built 60% of the largest underground hydro powerhouses in India and has executed more than 140 kilometers of tunneling on projects covering water supply, sewage, transportation and power generation. HCC built India's first major underground powerhouse for the Yamuna project in Uttar Pradesh in 1975. HCC built the country's longest 11.3-kilometer head race tunnel for the Nathpa Jhakri hydroelectric power plant. HCC undertakes a range of infrastructure projects, including oil and gas pipeline construction. The company holds a $2.4 billion order book and has seen profits rise at a rate of 21% per year.

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