The crude oil storages are constructed in underground rock caverns and are located on the East and West coast of India. Crude oil from these caverns can be supplied to the Indian Refineries either through pipelines or through a combination of pipelines and ships. Underground rock caverns are considered the safest means of storing hydrocarbons. The estimated cost of the project was around Rs.2400 crore at September 2005 prices. This excluded the cost of filling the crude oil in the caverns. Approval of the Union Cabinet was obtained to enhance the capacity at Visakhapatnam to 1.33 MMT and to permit utilization of the additional 0.3 MMT compartment by Hindustan Petroleum Corporation Limited (HPCL) on proportionate cost sharing basis. As a result of this approval, the strategic storage capacity is 5.03 MMT.
The approved Revised Cost Estimates for Visakhapatnam, Mangalore and Padur are Rs.1178.35, Rs 1227 crores and Rs 1693 crores respectively. The total cost of all the three projects is Rs 4098.35 crore, out of which Rs 265.79 crore is being provided by HPCL for the 0.3 MMT compartment at Visakhapatnam.