UAE is building £1.4bn oil reserve underground

UAE is building £1.4bn oil reserve underground

  06 Oct 2018

Above-ground tankage requires less investment for countries that do not have suitable underground caves, but are more vulnerable to a military ­attack.

Japan and South Korea already have existing subterranean oil storage facilities and, in 2014, Singapore ­officially opened the Jurong Rock ­Caverns, a network of tunnels with ­capacity to store 10 million barrels of oil underground.

In June, India approved plans to create two new underground oil storage facilities with a total capacity of 48 million barrels.

The facilities will be constructed in Chandikhol in India’s east and Padur in the south and will have capacities of 30 million barrels and 18 million barrels respectively. 

When completed, the projects will bring India’s total strategic reserve ­capacity to nearly 90 million barrels.

The US started building its strategic petroleum reserve after the Arab oil embargo in 1973, which resulted in soaring global oil prices and rationing at petrol pumps. 

It stores 660 million barrels of oil in a network of 60 caverns that have been carved into rock salt in Louisiana and Texas.

Crude oil prices have risen by around 50pc over the last 12 months amid uncertainty over global supply.

There are concerns that Saudi Arabia and Russia will not sufficiently increase output to replace Iranian exports when US sanctions snap back on Nov 4.

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