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Mangaluru: Indian government has asked Oil and Natural Gas Corporation (ONGC) to develop a new Strategic Petroleum Reserve (SPR) facility in Mangaluru. The project is estimated to cost around ₹15,000 crore (approximately $1.6 billion).
The decision comes after the recent Iran conflict highlighted India's vulnerability to global crude oil supply disruptions and underscored the need for larger emergency reserves. Officials believe expanding the country's strategic storage capacity is essential to protect the economy from geopolitical shocks and sudden spikes in oil prices.
The proposed underground crude oil cavern will have a storage capacity of 1.75 million metric tonnes (MMT). Once completed, it will increase India's current strategic petroleum reserve capacity of 5.33 MMT by nearly one-third.
India currently maintains strategic crude storage facilities at key locations, including Mangaluru, Visakhapatnam and Padur. These reserves are designed to provide emergency fuel supplies during wars, international crises, natural disasters or major disruptions in global oil markets.
The Iran conflict once again demonstrated how tensions in West Asia can affect global energy supplies. India imports more than 85 percent of its crude oil requirements, making it highly dependent on international markets.
By expanding strategic reserves, the government aims to ensure uninterrupted energy supplies, stabilize domestic fuel availability and reduce the impact of geopolitical uncertainties on the Indian economy.
The government has tasked ONGC with preparing the project and developing the new storage infrastructure in Mangaluru. The facility is expected to be built as an underground rock cavern, a globally accepted method for safely storing large quantities of crude oil for extended periods.
Officials view the project as a long-term investment in national energy security, helping India better withstand future global crises and supply shocks.
