ONGC Approves 1.75 Million Tonne Strategic Petroleum Reserve

The Oil and Natural Gas Corporation (ONGC) board has granted in-principle approval to develop a 1.75 million metric tonne strategic petroleum reserve (SPR) in Mangaluru, Karnataka. Designated as a project of national importance, the facility is a Phase-I extension of existing reserves and follows directives from the Ministry of Petroleum and Natural Gas. The project, estimated to cost $1.6 billion, marks the first time ONGC will fund the creation of a strategic crude storage facility.

This expansion aims to protect India's energy security from supply crunches and inflation caused by Middle East conflicts and disruptions in the Strait of Hormuz. India currently imports over 88% of its crude oil, and its existing 5.33 million tonne network covers only about 8 to 9.5 days of national demand, significantly below the International Energy Agency's 90-day recommendation.

ONGC is seeking government support to broaden commercial utilization of the site, including commodity trading and leasing storage. The Abu Dhabi National Oil Company already leases capacity at the Mangaluru site and plans to increase its total crude storage in India to 30 million barrels. This project integrates into a wider strategy that includes existing sites in Visakhapatnam and Padur, as well as planned facilities in Chandikhol, Bina, and Bikaner.