ONGC To Build 1.75 MT Strategic Oil Reserve In Mangalore, Seeks Commercial Use Nod

Oil and Natural Gas Corporation (ONGC), India's top explorer, will build a 1.75 million metric tonne (MT) national strategic petroleum reserve in Mangalore, the company said in a stock exchange filing on Thursday. ONGC said it would seek the federal government's permission for commercial use of the storage, to be built in "national interest."

The move comes after India, the world's third-largest oil importer and consumer, was hit by the blockade of the Strait of Hormuz following Israel-US attacks on Iran. About a fifth of the world's energy supplies pass through the waterway.

India Widens Energy Cooperation

India is strengthening its emergency stockpile through enhanced energy cooperation with countries including the United Arab Emirates and Japan.

India currently has a strategic crude storage capacity of 5.33 MT across underground caverns at Visakhapatnam in Andhra Pradesh, and Mangaluru and Padur in Karnataka. These facilities are operated by government-owned Indian Strategic Petroleum Reserves Ltd (ISPRL). According to government data, the existing reserves are sufficient to meet around 9.5 days of India's crude oil requirement, based on 2019-20 consumption levels.

New Delhi already permits commercial use of part of this storage. Mangalore Refinery and Petrochemicals Ltd (MRPL), an ONGC subsidiary that operates a 300,000 barrel-per-day refinery in Mangalore, has leased half of the existing 1.5 MT Mangalore reserve. The remaining capacity has been leased to Abu Dhabi National Oil Company (ADNOC) of the UAE, allowing the facility to generate commercial returns while remaining available for strategic use during emergencies.

More Storage Planned Across India

India also plans to build a 4 MT strategic reserve at Chandikhol in Odisha and a new 2.5 MT facility at Padur in Karnataka. Together with the new Mangalore facility, these projects are expected to substantially increase the country's capacity to handle supply disruptions.

During Prime Minister Narendra Modi's visit to the UAE earlier this year, ADNOC announced plans to increase crude oil storage in India to up to 30 million barrels. ADNOC also said it would explore potential crude storage at Fujairah in the UAE as part of India's strategic reserve arrangement.

The expansion is part of a broader push by New Delhi to build larger emergency crude stockpiles as geopolitical tensions and supply chain disruptions raise the risk of oil supply shocks.

Mangaluru remains one of India's key energy hubs, with MRPL's refinery operations based there. The government's push to expand strategic reserves follows the recent West Asia conflict, which affected global energy flows and oil markets.