India is set to store oil in the US, to protect itself from any potential future supply disruptions, and to use for trading to take advantage of low international prices, officials said.
The two countries signed a preliminary MoU at the second US-India Strategic Energy Partnership (SEP) ministerial meet on Friday, to begin cooperation on the operation and maintenance of strategic petroleum reserves, which includes the exchange of information and best practices. The two sides also discussed the possibility of India storing oil in the US emergency oil stockpile.
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Union Minister of Petroleum and Natural Gas Dharmendra Pradhan said that the move was based on a proposal from the US following the historic inversion of oil prices in April due to the COVID-19 pandemic. He said that the oil price collapse had prompted Indian authorities to actively consider increasing its oil stockpile both within India, and abroad, and that the government will soon release a concrete roadmap and a plan for its implementation. The minister added that working together in the Strategic Petroleum Reserves Programme will further strengthen India’s energy security and pave the way for greater US investments and collaborations in India’s future Strategic Petroleum Reserve (SPR) programs.
US Energy Secretary Dan Brouillette said that the MoU will initiate the process of moving forward, and said that though a similar agreement between the US and Australia could be a model, there was “no predetermined outcome” for the negotiations, and that the US was eager to begin talks with India on this important matter.
At the virtual ministerial, the two countries signed multiple MoUs on issues ranging from emerging fuels, to energy efficiency and smart grids. According to the joint statement, the various agreements and partnerships that were announced are as follows:
- MOU between the U.S. Department of Energy and the Indian Ministry of Petroleum and Natural Gas concerning cooperation on Strategic Petroleum Reserves.
- MOU between the U.S. Agency for International Development (USANOID) with Indian Society of Heating Refrigeration and Air Conditioners (ISHRAE) for professional skill development for practitioners on energy-efficient design of air conditioning systems.
- MOU between EESL, NTPC, and USAID for retrofit of buildings to improve indoor air quality, safety, and efficiency.
- USAID announced partnership with Power System Operation Corporation (POSOCO) to develop India’s National Open Access Registry (NOAR).
- Statement of Intent between the U.S. Department of State and India’s Ministry of Power under the Flexible Resources Initiative of the U.S.-India Clean Energy Finance Task Force to enhance the flexibility and robustness of India's grid to support the country's energy transition and mobilize the private investment to deliver reliable, low-cost power for the people of India.
- The Federal Energy Regulatory Commission (USA) and the Central Electricity Regulatory Commission in India are working to conclude an agreement to share best practices for regulating electricity and developing electricity markets.
- The U.S. Department of Commerce launched an Energy Industry Working Group for India under the Asia EDGE initiative to facilitate private sector connections and ideas for U.S.-India energy cooperation, including on innovative and disruptive technologies.
- USTDA is supporting energy access and efficiency in India through recently funded projects to implement virtual pipeline infrastructure with Arush Gas Technology Services (AGTS) and carbon capture and utilization technologies in refineries with Indian Oil Corporation Limited (IOCL).
- Release of a “Strategic Roadmap of Smart Grid Knowledge Centre to become a “Global Centre of Excellence in Smart Grids” at an industry round table held on the sidelines of the Power and Energy Efficiency pillar meeting, sponsored by the Ministry of Power of India and USAID.
Under the U.S.-India Gas Task Force:
- MOU between the Federal Energy Regulatory Commission (FERC) and Petroleum Natural Gas Regulatory Board (PNGRB) on information exchange in oil & gas regulatory frameworks.
- MOU between Bloom Energy and Indian Oil on fuel cell technology.
- Letter of Cooperation among ExxonMobil, Chart Industries IOCL on stimulating LNG demand through a virtual pipeline network and manufacturing and use of ISO containers in India.
- MOU between Agility Fuel Solutions LLC and Indrapastha Gas Limited (IGL) to explore the viability, usefulness, and feasibility of advanced clean fuel systems including Type IV cylinders in India.
- MOU between Gasway USA, Inc. and Indrapastha Gas Limited (IGL) to explore the feasibility of a pilot virtual gas pipeline project.
- ExxonMobil and GAIL have made significant progress on the MOU they signed in 2019 to enhance India’s natural gas access and are engaged in a commercial dialogue to advance LNG as fuel in heavy commercial vehicles.