Indian Oil Corporation (IOC), the nation's largest oil firm, will build nine more storage tanks to stock additional 10 million tonnes of crude oil at Adani group-operated Mundra port in Gujarat.

"Adani Ports and Special Economic Zone (APSEZ) has signed an agreement with IOC towards augmentation of IOC's crude oil volumes at Mundra," the Adani group firm said in a statement.

IOC will expand its existing crude oil tank farm at APSEZ's Mundra Port, thus enabling it to handle and blend additional 10 million tonnes of crude oil at Mundra. "This will support IOC's expansion of its Panipat refinery in Haryana," the statement said.

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IOC is raising the capacity at its Panipat refinery to 25 million tonnes per annum from the current 15 million tonnes to meet India's rapidly growing energy requirements.

"Mundra Port is a major economic gateway that serves the northern hinterland of India by providing multimodal connectivity. It gives us immense pride to strengthen our partnership further and support IOC, which plays a vital role in ensuring the energy security of the nation," said Karan Adani, CEO of APSEZ.

APSEZ, he said, is well equipped to handle the additional 10 million tonnes of crude oil at its existing single buoy mooring (SBM) at Mundra.

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IOC, which controls a little less than half of the country's fuel market, has a capacity to refine 80.55 million tonnes of crude oil per annum into fuel. It has over 15,000 kilometres of pipeline network.

Part of IOC's current crude oil requirement of 15 million tones for its Panipat Refinery is handled at the SBM at Mundra Port. The Mundra SBM is located 3-4 km off the coast where very large crude carriers (VLCCs) unload crude oil.

An undersea pipeline then transports this crude oil from SBM to the crude oil tank farm and thereafter to the refinery at Panipat via the Mundra Panipat Pipeline (MPPL).

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IOC currently operates a crude oil tank farm in an exclusive area in Adani's Mundra Special Economic Zone, consisting of 12 tanks with a total capacity of 7,20,000 kilolitres. The addition of nine new tanks will augment the storage capacity to 1,260,000 kl, thus making Mundra Port by far the largest port-based crude oil storage facility for IOC.

This shall be accompanied by augmentation of the MPPL pipeline capacity by IOC to 17.5 million tonnes per annum. IOC's board had approved a capital expenditure of Rs 9,000 crore for the crude oil tanks and MPPL augmentation in December 2021.

"This expansion project at Mundra Port underlines the trust of state-run IOCL in APSEZ, earned through its strategic approach of modernising its ports, improving turnaround time, and thus creating value for its customers," the statement said.

APSEZ is the largest port developer and operator in India with six strategically located ports and terminals on the west coast (Mundra, Dahej, Tuna and Hazira in Gujarat, Mormugao in Goa, and Dighi in Maharashtra) and six ports and terminals on the East coast of India (Dhamra in Odisha, Gangavaram, Visakhapatnam, and Krishnapatnam in Andhra Pradesh, and Kattupalli and Ennore in Chennai) representing 24 percent of the country's total port capacity.

The company is also developing two transshipment ports at Vizhinjam (Kerala) and Colombo (Sri Lanka).

(Edited by : Jomy Jos Pullokaran)