India is set to significantly expand its emergency crude oil storage capacity, with state-run Oil and Natural Gas Corporation (ONGC) approving the construction of a new 1.75 million metric ton (MMT) strategic petroleum reserve (SPR) in Mangaluru. The move comes after recent geopolitical tensions in West Asia exposed the country's vulnerability to global oil supply disruptions and reinforced the need for a stronger energy security buffer.
ONGC will develop a 1.75 MMT strategic petroleum reserve at Mangaluru.
The facility will be built on land already owned by ONGC.
It will increase India's existing strategic crude storage capacity of 5.33 MMT by nearly one-third.
The company will seek central government approval to commercially utilise the storage in the national interest.
The project marks the first time ONGC is independently funding a strategic petroleum reserve.
The decision follows the recent disruption in oil supplies after the temporary blockade of the Strait of Hormuz during the West Asia conflict. Around 20 percent of the world's oil and LNG trade passes through the narrow shipping route, making it one of the most strategically important energy corridors.
India, the world's third-largest importer and consumer of crude oil, imports nearly 85 percent of its oil requirement. Any disruption in global supplies can therefore have an immediate impact on domestic fuel availability, inflation and economic growth.
India currently maintains strategic petroleum reserves with a combined capacity of 5.33 MMT at:
Mangaluru
Padur (Karnataka)
Visakhapatnam
These underground rock caverns are managed by Indian Strategic Petroleum Reserves Ltd (ISPRL). The additional 1.75 MMT facility will substantially strengthen the country's emergency preparedness against geopolitical shocks and crude price volatility.
Mangaluru is already one of India's key petroleum hubs. ONGC subsidiary Mangalore Refinery and Petrochemicals Ltd (MRPL) operates a refinery with a capacity of around 300,000 barrels per day.
Half of the existing 1.5 MMT strategic storage at Mangaluru has been leased by MRPL, while the remaining capacity is leased to Abu Dhabi National Oil Company (ADNOC), reflecting India's growing energy partnership with the UAE.
India has been expanding strategic energy cooperation with the United Arab Emirates and Japan.
Earlier this year, during Prime Minister Narendra Modi's visit to the UAE, ADNOC announced plans to increase crude oil storage in India to as much as 30 million barrels. The two countries are also exploring the possibility of storing Indian strategic crude at Fujairah in the UAE, giving India greater flexibility during supply emergencies.
The Mangaluru expansion is part of a broader strategy to build larger emergency reserves across the country.
The government has already approved:
A 4 MMT strategic petroleum reserve at Chandikhol in Odisha.
A new 2.5 MMT facility at Padur in Karnataka.
Together with the new ONGC project, these facilities will significantly improve India's capacity to withstand supply disruptions arising from wars, sanctions or shipping bottlenecks.
Industry estimates suggest the new Mangaluru reserve could require an investment of around ₹15,000 crore, including construction of underground caverns and procurement of crude oil to fill them. While ONGC will finance the project, the company has indicated that it will seek government approval to commercially utilise part of the storage to improve project economics.
Strategic petroleum reserves act as an insurance policy for oil-importing nations. They help governments maintain fuel supplies during wars, natural disasters, shipping disruptions or sudden spikes in crude prices. As India's energy demand continues to rise, expanding these reserves has become a key pillar of the country's long-term energy security strategy.