ONGC Approves Expansion Of Strategic Oil Reserves With New Mangalore Storage Facility
· Free Press Journal
State-owned Oil and Natural Gas Corporation (ONGC) has approved a major expansion of India’s strategic crude oil storage capacity as the country moves to strengthen energy security following disruptions caused by the Iran conflict.
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The board of India’s largest oil and gas producer has cleared a proposal to add 1.75 million tonnes of strategic oil reserve capacity at Mangalore in Karnataka, according to a regulatory filing.
The company has not disclosed the estimated cost or timeline for completing the project.
The additional storage will increase the capacity managed by Indian Strategic Petroleum Reserves (ISPRL), the government-owned entity responsible for maintaining the country’s strategic crude reserves.
Currently, ISPRL operates underground storage facilities at three locations along India’s eastern and western coasts, with a combined capacity of 5.33 million tonnes.
Two additional storage projects are under development and are expected to add another 6.5 million tonnes of capacity.
India imports a significant share of its crude oil requirements from the Persian Gulf region.
The near shutdown of the Strait of Hormuz during the Iran conflict exposed vulnerabilities in global energy supply chains and forced oil-importing nations to explore alternative sources.
ONGC’s decision marks the first instance of a government-owned company using its own funds to develop strategic crude storage infrastructure.
Earlier, state-run refiners and oil producers primarily focused on building commercial storage facilities rather than strategic reserves.
India Holds Oil Reserves For Up To 80 Days Of Consumption: Petroleum Minister Hardeep Singh PuriONGC described the Mangalore project as being of “national importance” and said it would also develop related infrastructure at the site in line with directions from the Ministry of Petroleum and Natural Gas.
The government aims to build crude oil, liquefied natural gas and petroleum gas reserves sufficient to cover up to one month of domestic demand.
To achieve this goal, authorities have encouraged public-private partnerships while also urging state-run energy companies to expand commercial and strategic storage capacities.
ONGC may utilise its existing infrastructure links with subsidiary Mangalore Refinery and Petrochemicals Ltd. (MRPL), which operates a 300,000-barrel-per-day refinery in Karnataka, for the new storage facility.
The existing Mangalore strategic storage facility has attracted international participation, with companies including Abu Dhabi National Oil Co. (ADNOC), the UAE’s largest oil producer, leasing storage space there.
The expansion is expected to improve India’s ability to manage future supply shocks, reduce vulnerability to geopolitical disruptions and strengthen long-term energy resilience.