India Expands Strategic Oil Reserves with Two New Facilities and $1.6 Billion ONGC Storage Project

Indian Strategic Petroleum Reserves Ltd, a government-owned special purpose vehicle, is finishing feasibility studies for two new strategic petroleum reserve facilities. The company is progressing with a feasibility study for a facility in Bikaner, Rajasthan, and has completed a pre-feasibility study for underground caverns in Bina, Madhya Pradesh. These two planned facilities, designed to hold strategic petroleum reserves, will join the Mangalore storage project led by Oil and Natural Gas Corporation (ONGC).

The Mangalore project, located on the Arabian Sea coast in Karnataka, is designed to hold 1.75 million metric tons of crude oil, equivalent to about 13 million barrels. Half of the facility's capacity will be used for strategic reserves, with the remainder supporting ONGC's commercial operations, as disclosed to parliament by Suresh Gopi, India's Minister of State for Petroleum and Natural Gas.

As one of the world's major crude importers, India's current maximum reserve capacity covers only eight days of domestic oil demand. After disruptions to crude flows through the Strait of Hormuz amid the Iran war, India sought alternative supplies to those from the Middle East, and record Russian crude imports eased some pressure, but additional storage capacity is considered a necessary supplement. To that end, the Indian government has directed ONGC to build and fill a new strategic petroleum reserve facility, with an estimated investment of $1.6 billion. The plan forms part of India's broader push to strengthen energy security and close gaps in its existing reserve capacity.