Creating underground oil reservoirs in Russia could take 2-3 years, feasibility studies must be undertaken - SRC chief

NOVY URENGOY. April 7 (Interfax) - The state should select a responsible entity and commission a feasibility study for creating underground oil storage reservoirs, which can then be organized fairly quickly, State Commission for Mineral Resource Reserves (SRC) chief Igor Shpurov said at the Yamal Oil and Gas Forum.

"One of our proposals [amid problems with oil sales under sanctions], we are discussing it today everywhere at all levels - is the creation of underground oil storage reservoirs similar to UGS facilities for gas, which create such a buffer today, and the gas industry feels better in this sense than the oil industry," he said.

"The U.S. has such underground storage facilities, they created them long ago, in saline sediments, they hold about 100 million tonnes of oil. We have that possibility for underground storage as well, similar storage reservoirs can be created in saline basins with either the same or higher capacity," Shpurov said.

"This can be done rather quickly, but today we must begin project feasibility studies and pre-project development of such storage facilities. Even if this is only created in 2-3 years, it is imperative that we do this," the SRC chief said.

Initiatives aimed at creating UGS reservoirs for oil reserves were actively discussed in 2020, when restrictive measures due to Covid-19 led to reduced demand and lower oil prices. Experts from the Russian Gas Society said then that reserves totaling 10-20% of annual production must be created [561 million tonnes in 2019]. According to the society, creating such oil storage facilities from scratch will take 10-12 years, or 3-5 years if exhausted deposits are used for storage.