(Zero Hedge)—Russia’s first underground oil storage facility, built by a subsoil user in the Krasnoyarsk territory, is ready for trial operation, said Nina Erofeeva, head of the Oil and Gas Geology, Groundwater and Structures Department at the Federal Subsurface Resources Agency, according to Interfax.
Speaking at a conference on subsoil use, reserves appraisal, and regulations, Erofeeva said: “The first [licenses] have been received for the creation of oil storage facilities, in the Krasnoyarsk territory. This was also an unusual case. Russia has never had oil storage facilities. Oil has always been pumped through pipelines.
“Given recent events and the lack of infrastructure in the Arctic zone, oil storage facilities are needed in several regions. Accordingly, oil will be placed in these oil storage facilities so as not to burn it during pilot development.”
The idea of building underground oil storage was actively discussed in 2020 when the COVID-19 pandemic caused oil demand and prices to fall.
Interest in the idea grew again in March 2022 after Russian crude oil faced a global boycott. Experts from the Russian Gas Society said the ideal reserve volume should be 10-20% of annual production—about 55-100 million tonnes based on 2019 levels. They estimated it would take 10-12 years to build such facilities from scratch, but only 3-5 years if built in depleted oil fields.
Interfax writes that in September 2023, Rosnedra’s Central Commission approved the project for this first underground storage facility.
At the time, Igor Shpurov, head of the State Mineral Reserves Commission, clarified: “There is not a very large volume there, this for operating storage of oil, not strategic.”
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