The Government of India has entrusted the Oil and Natural Gas Corporation (ONGC) with the development of a new Strategic Petroleum Reserve (SPR) facility in Mangaluru, Karnataka. The proposed underground crude oil storage cavern is expected to cost around ₹15,000 crore and will add 1.75 million metric tonnes (MMT) to India’s strategic crude oil storage capacity.
Strengthening India’s Energy Security
Strategic Petroleum Reserves are emergency stockpiles of crude oil maintained to safeguard a country against disruptions in global oil supplies, geopolitical tensions, or sudden market shocks. These reserves help ensure energy security by providing a buffer during supply crises.
India currently operates SPR facilities at Visakhapatnam, Mangaluru, and Padur, with a combined storage capacity of 5.33 MMT.
ONGC to Finance and Build the Project
Unlike previous strategic reserve projects, which were developed and managed by Indian Strategic Petroleum Reserves Limited (ISPRL), the new Mangaluru facility will be financed and constructed directly by ONGC using its own balance sheet.
ONGC, a state-owned energy major under the Ministry of Petroleum and Natural Gas, already owns the land identified for the project, facilitating faster implementation.
Project Cost and Capacity
The estimated ₹15,000 crore project cost includes:
- ₹5,000 crore for construction of the underground storage cavern.
- ₹10,000 crore for filling the reserve with crude oil at current market prices.
Upon completion, the facility will increase India’s strategic crude oil storage capacity by approximately one-third, significantly enhancing the country’s emergency preparedness.
Key Facts
- The new Mangaluru SPR will add 1.75 MMT of storage capacity.
- India’s existing strategic crude oil storage capacity stands at 5.33 MMT (approximately 39 million barrels).
- Current SPR facilities are located at Visakhapatnam, Mangaluru, and Padur.
- India imports nearly 88% of its crude oil requirements.
- Strategic petroleum reserves are maintained to address supply disruptions arising from geopolitical conflicts, natural disasters, or market volatility.
Relevant Context
Indian Strategic Petroleum Reserves Limited (ISPRL) is the public sector entity associated with India’s strategic crude oil storage programme. The proposed Mangaluru reserve will be developed as an underground rock cavern, a globally accepted and secure method for storing large quantities of crude oil.
The project marks a significant step toward strengthening India’s energy resilience and reducing vulnerability to global supply disruptions.