The proposal will figure prominently between India and Arab nations during the three-day visit of prime minister Manmohan Singh to Saudi Arabia beginning Saturday. Petroleum minister Murli Deora and honchos of the country’s upstream and oil marketing companies will be part of the prime minister’s delegation. India will offer land in Rajasthan for the gulf nations to set up their storage stations, said a petroleum ministry official.

The volume and products to be stored can be at their discretion. Engineers India Limited (EIL) will help with required consultancy needs, he added. The countries can use India as a transit point to supply oil to south Asian nations. These projects will help India to build strong bilateral relationship with the countries along with securing an emergency backup of crude and petroleum products. The facilities in Rajasthan will be connected through Kandla port.

India, which imports close to 80 per cent of its crude oil, is building storage terminals similar to those in countries such as the US, Japan and China. Petroleum secretary S Sundareshan had earlier said that the first storage terminal would be completed by mid-2011 and two others will be operational in the following year.

The first terminal will be built at Visakhapatnam with a capacity of 1.33 million tonnes. The other two terminals will be constructed at Mangalore that will take India’s total storage capacity close to 5 million tonnes. India is planning for emergency oil storage capacity up to 15 million tonnes. This will be achieved in phases.

Recently, India offered world’s third-largest oil rich country, Iraq, to use some of the space in these terminals. This will help India secure long-term energy contracts. India’s crude oil import in the first nine months of this financial year rose by 12 per cent to 109.32 million tonnes.