India Expands Strategic Oil Storage with New ONGC Project

India is set to strengthen its energy security by dedicating a significant portion of a new oil storage project to its Strategic Petroleum Reserve (SPR). According to media reports, state-owned Oil and Natural Gas Corporation (ONGC) will reserve half of its upcoming 1.75 million-ton storage facility in Mangaluru, Karnataka, for strategic crude oil reserves.

The new facility, announced by ONGC last month, will be developed near the Mangalore Refinery and Petrochemicals Ltd. (MRPL) complex, which operates a 300,000-barrel-per-day refinery. The project is part of the government's broader strategy to enhance emergency oil reserves while encouraging greater participation from the private sector.

India currently has a strategic storage capacity of 5.33 million tons, spread across Mangaluru, Padur, and Visakhapatnam. Combined with refinery storage tanks, offshore facilities, and pipeline infrastructure, the country's total oil storage capacity is sufficient to cover around 74 days of net oil imports, providing a crucial buffer against supply disruptions.

To further strengthen energy security, the government is planning an additional 6.5 million tons of strategic storage capacity. This includes a 4 million-ton reserve at Chandikhol in Odisha and a 2.5 million-ton expansion of the existing Padur facility. Land acquisition for the Chandikhol project has already been completed, and the project is expected to be developed in partnership with private companies.

The Chandikhol storage project is estimated to require an investment of approximately INR 90 billion (around $944 million). Once completed, these new facilities will significantly enhance India's ability to manage supply disruptions and reinforce the country's long-term energy security strategy.

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