
The U.S. Department of Energy (DoE) is negotiating contracts with nine domestic oil producers to enable them to store their crude oil in the country’s strategic petroleum reserves (SPR) facilities.
Small, medium and large producers will take advantage of 23 million barrels federal storage capacity, in four SPR sites, Kallanish Energy reports.
Most deliveries will take place in May and June, but early deliveries in April are “possible,” the DoE said in statement earlier this week. It didn’t disclose the U.S. companies being considered for the awards.
The awardees can schedule return of their oil through March 2021, minus a small amount to cover the SPR’s cost of storage, the DoE said without elaborating.
Energy secretary Dan Brouillette said the U.S. is facing an enormous decrease in crude demand as it works to contain the Covid-19 pandemic. “This is why making storage capacity available in the SPR is so important. Providing our storage for these U.S. companies will help alleviate some of the stress on the American energy industry and its incredible workforce,” he said.
Following an order from President Donald Trump, the DoE continues to look into purchasing crude oil from domestic producers to offer some sort of economic relief. Dealing with the storage crunch is also a government priority.
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