India is set to strengthen its energy security with a new strategic crude oil storage facility to be developed by the state-owned Oil and Natural Gas Corporation (ONGC). The proposed facility will have a storage capacity of 1.75 million tonnes of crude oil, equivalent to around 12.8 million barrels.
According to reports, ONGC will also seek government approval to allow commercial use of the reserve when required, ensuring better utilisation of the storage infrastructure.
At present, India maintains strategic petroleum reserves of 5.33 million tonnes (around 39 million barrels) across three underground storage facilities in southern India. These reserves, managed by Indian Strategic Petroleum Reserves Limited (ISPRL), are sufficient to meet approximately eight days of the country’s crude oil demand.
Last month, the Central Government directed ONGC to construct and fill the new strategic reserve with an estimated investment of 1.6 billion US dollars. The move comes in response to recent global energy supply disruptions, which have led to higher fuel prices and increased inflation in India, one of the world’s largest crude oil importers.
The government has been working to expand the country’s strategic oil storage capacity as domestic energy demand continues to rise rapidly. Recent geopolitical tensions in the Middle East have further highlighted the importance of maintaining adequate emergency crude reserves.
Apart from the ONGC project, India is also planning two additional strategic storage facilities. One will have a capacity of 4 million tonnes (around 29 million barrels), while the second will be capable of storing 2.5 million tonnes (approximately 18.3 million barrels) of crude oil.
India is also exploring partnerships to store crude oil for foreign producers. During Prime Minister Narendra Modi’s recent visit to the United Arab Emirates, Abu Dhabi National Oil Company (ADNOC) expressed its intention to increase the volume of crude oil stored in India to 30 million barrels. In return, India is considering storing part of its crude oil reserves at the UAE’s Fujairah port, providing greater flexibility in energy logistics outside the Strait of Hormuz.
