Government company ONGC has approved the creation of strategic petroleum reserve of 17.5 lakh metric tonnes in Mangalore. The project aims to strengthen India’s energy security amid growing global uncertainties, as the country meets 85% of its oil needs through imports.
New Delhi [भारत]July 10 (ANI): State-owned Oil and Natural Gas Corporation (ONGC) has approved the creation of a Strategic Petroleum Reserve (SPR) of 17.5 lakh metric tonnes (MMT) capacity in Mangalore. This is a major step towards strengthening India’s energy security amid rising geopolitical uncertainties and rising demand for crude oil.
ONGC said in a stock exchange filing that the company’s board of directors has approved the decision. The Board has given “in-principle approval for development of Strategic Petroleum Reserve and associated facilities of 1.75 MMT capacity at Mangalore (Phase-I Expansion) as a project of national importance, as per the directions of the Ministry of Petroleum and Natural Gas (MoP&NG)”. According to the filing, the board has also directed the company to “negotiate with the Government of India to widen the commercial exploitation opportunity with relevant regulatory support.”
Why is this project important
The project comes at a time when India is continuously expanding its emergency crude oil storage infrastructure to protect the economy from global supply disruptions. India is the world’s third largest crude oil importer and consumer, meeting more than 85 percent of its oil requirements through imports. For this reason, strategic reserves are an important part of its energy security architecture.
India’s current storage capacity
India currently has strategic petroleum reserve facilities at Visakhapatnam (1.33 MMT), Mangalore (1.5 MMT) and Padur (2.5 MMT) with a total capacity of 5.33 MMT, operated by the Indian Strategic Petroleum Reserves Limited (ISPRL). The Center has also approved commercial-cum-strategic storage of additional 6.5 MMT at Chandikhol (4 MMT) and Padur (2.5 MMT) in Odisha as part of the next phase of expansion. The proposed ONGC project will add additional 1.75 MMT capacity at Mangalore, thereby expanding storage capacity at one of India’s major strategic petroleum hubs on the west coast.
International cooperation and future plans
According to recent reports, the move follows heightened concerns over disruptions in global oil supply and reflects the government’s push to accelerate the expansion of emergency crude oil storage capacity. India has also deepened international energy partnerships in recent years to strengthen its strategic reserves. The Mangalore facility already has crude oil stored by Abu Dhabi National Oil Company (ADNOC) under an agreement with ISPRL, which allows India to use a part of the crude commercially while maintaining strategic access during emergencies.
Recently, during Prime Minister Narendra Modi’s visit to the UAE, ADNOC announced plans to significantly expand crude oil storage in India and explore potential storage arrangements linked to India’s Strategic Petroleum Reserve Programme, further strengthening bilateral cooperation in energy security.
What are Strategic Petroleum Reserves?
Strategic petroleum reserves are government-controlled reserves of crude oil maintained to ensure uninterrupted supply during geopolitical conflicts, natural disasters, or sharp disruptions in global oil markets. India’s expansion of these reserves aims to reduce sensitivity to external shocks, as well as support long-term energy security as the country’s fuel demand grows. (ANI)
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