ONGC Expands Strategic Oil Reserves At Mangalore

India's largest oil and gas producer, Oil and Natural Gas Corporation (ONGC), has approved a major expansion of the country's strategic crude oil storage capacity. The expansion will add 1.75 million tonnes of strategic oil reserve capacity at Mangalore in Karnataka.

The board of ONGC has cleared a proposal for the expansion, which 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.

The expansion is part of India's efforts to strengthen energy security following disruptions caused by the Iran conflict. The country imports a significant share of its crude oil requirements from the Persian Gulf region, and the near shutdown of the Strait of Hormuz during the conflict exposed vulnerabilities in global energy supply chains.

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.

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.

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. 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 expansion is expected to improve India's ability to manage future supply shocks, reduce vulnerability to geopolitical disruptions and strengthen long-term energy resilience. According to Petroleum Minister Hardeep Singh Puri, India currently holds oil reserves for up to 80 days of consumption.

The project has been described by ONGC as being of “national importance” and will also involve the development of related infrastructure at the site in line with directions from the Ministry of Petroleum and Natural Gas. Two additional storage projects are under development and are expected to add another 6.5 million tonnes of capacity.

The expansion of strategic oil reserves is a significant step towards achieving energy security and reducing dependence on imported oil. With the growing demand for energy in India, the need for strategic oil reserves has become increasingly important. The government's efforts to encourage public-private partnerships and urge state-run energy companies to expand commercial and strategic storage capacities are expected to play a crucial role in achieving this goal.

In conclusion, the expansion of strategic oil reserves at Mangalore is a significant development in India's efforts to strengthen energy security. The project is expected to improve the country's ability to manage future supply shocks and reduce vulnerability to geopolitical disruptions, thereby strengthening long-term energy resilience.