ONGC expands India's strategic oil reserves
What's the story
State-owned Oil and Natural Gas Corporation (ONGC) has approved a major expansion of India's strategic oil reserves. The move comes as part of the company's efforts to bolster energy security amid global geopolitical tensions. The project will add 1.75 million metric tons (MMT) of storage capacity at Mangaluru, Karnataka, marking the first time India's largest explorer will fund such a facility independently.
Expansion details
In-principle approval for Phase-I expansion
The ONGC board has given in-principle approval for the Phase-I expansion of the Mangaluru strategic petroleum reserve project. The move is in line with directives from the Ministry of Petroleum and Natural Gas. Once completed, this project will add 1.75 MMT to India's strategic petroleum reserve network, which is currently managed by Indian Strategic Petroleum Reserves Ltd (ISPRL).
Storage capacity
India currently has 5.33 MMT of strategic crude storage
India currently has a total of 5.33 MMT of strategic crude storage in underground caverns at Visakhapatnam, Mangaluru, and Padur in Kerala. This is enough to meet nearly nine-and-a-half days of the country's crude oil requirement based on 2019-20 consumption patterns. The expansion project by ONGC comes as India intensifies efforts to strengthen its energy security after recent geopolitical disruptions exposed the vulnerability of global oil supply chains.
Strategic location
Mangaluru as a strategic hub
Mangaluru is already a major strategic oil storage hub for India. ONGC subsidiary Mangalore Refinery and Petrochemicals Ltd (MRPL) runs a 300,000-barrel-per-day refinery at the site. The existing underground caverns have been leased to international companies such as Abu Dhabi National Oil Co (ADNOC), allowing India to combine strategic storage with commercial utilization.