Media365
India has taken another step towards strengthening its energy security after the recent disruption in the Strait of Hormuz, with state-run Oil and Natural Gas Corporation (ONGC) approving a new 1.75 million metric tonne (MT) strategic petroleum reserve (SPR) at Mangaluru in Karnataka.
The project, approved by ONGC’s board, comes after the Iran conflict briefly disrupted traffic through the Strait of Hormuz, one of the world’s most critical energy chokepoints through which nearly a fifth of global oil supplies pass. The episode underscored the vulnerability of import-dependent economies such as India, which relies on overseas shipments for more than 85 per cent of its crude oil requirements.
In a regulatory filing, ONGC said its board had given in-principle approval for the Phase-I expansion of the Mangaluru strategic petroleum reserve project, along with associated facilities, in line with directions from the Ministry of Petroleum and Natural Gas.
The project will add 1.75 million metric tonnes of storage capacity to India’s strategic petroleum reserve network and marks the first time ONGC, the country’s largest oil and gas explorer, will fund the development of a strategic crude storage facility.
The company also said it would seek approval from the central government to commercially utilise the proposed storage facility in the “national interest”, continuing a model already adopted for some of India’s existing strategic reserves.
The latest move is part of a broader push by New Delhi to build larger emergency crude stockpiles as geopolitical tensions and supply chain disruptions increase the risk of oil supply shocks.
India currently has strategic crude storage capacity of 5.33 million metric tonnes across underground caverns at Visakhapatnam in Andhra Pradesh, Mangaluru and Padur in Karnataka. The facilities are operated by Indian Strategic Petroleum Reserves Ltd. (ISPRL).
According to government data, the existing reserves are sufficient to meet around 9.5 days of India’s crude oil requirement based on 2019-20 consumption levels.
The Mangaluru expansion will significantly strengthen the country’s emergency stockpile and complement plans for additional strategic storage projects elsewhere.
India is also developing a 4 million metric tonne strategic petroleum reserve at Chandikhol in Odisha and another 2.5 million metric tonne facility at Padur, which together will substantially increase the country’s ability to withstand supply disruptions.
Mangaluru is already one of India’s most important energy hubs. ONGC subsidiary Mangalore Refinery and Petrochemicals (MRPL) operates a 300,000-barrel-per-day refinery there.
The existing 1.5 million metric tonne strategic reserve at Mangaluru is operated under a mixed strategic-commercial model. Half of the capacity has been leased to MRPL, while the remaining storage is leased to Abu Dhabi National Oil Company (ADNOC), allowing the facility to generate commercial returns while remaining available for strategic use during emergencies.
India has also been expanding international cooperation to bolster its energy security.
During Prime Minister Narendra Modi’s visit to the United Arab Emirates earlier this year, ADNOC announced plans to increase crude oil storage in India to as much as 30 million barrels. The company also said it would explore storing part of India’s strategic crude reserves at Fujairah in the UAE, creating an overseas component to India’s emergency stockpiling strategy.
The government’s efforts to expand strategic reserves reflect a broader lesson from the recent West Asia conflict, which exposed how quickly geopolitical tensions can disrupt global energy flows and trigger volatility in oil markets.
For India, the world’s third-largest importer and consumer of crude oil, larger strategic reserves are increasingly being seen as an essential safeguard against future supply disruptions, while also providing greater flexibility in managing price shocks and ensuring uninterrupted fuel supplies.
With inputs from agencies.
