The Abu Dhabi National Oil Company (Adnoc) has finalised an agreement with the Indian government to implement a strategic crude oil storage facility in the southern Indian city of Mangalore.

MEED had reported that the initial agreement to establish the facility in Mangalore was signed between the two sides in January 2017, during a visit to India by HH Sheikh Mohamed bin Zayed, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the Armed Forces of the UAE.

Adnoc’s partnership with the state-owned Indian Strategic Petroleum Reserves Ltd (ISPRL), mandated to store crude oil for strategic needs, covers the storage of 5.86 million barrels of its crude oil in underground units at the Mangalore facility.

Adnoc has reportedly agreed  for ISPRL to consume up to two-thirds of the stored oil for free.

The oil storage facility in the southern Indian state of Karnataka will help boost India’s energy security, as well as enable Adnoc to competitively supply the rising market demand for oil in India and other Asian economies.

The oil storage deal was the second crucial deal Adnoc has signed with India, during Indian Prime Minister Narendra Modi’s ongoing visit to the UAE.

Adnoc has also awarded an Indian oil and gas consortium led by the state-owned Oil and Natural Gas Corporation (ONGC) a 10 per cent stake in one of the three blocks of the new Adnoc Offshore oil concession.