ONGC to undertake 1.75 MMT strategic oil reserve expansion at Mangaluru

State-run Oil and Natural Gas Corporation (ONGC) has approved the development of a 1.75 million metric tonne (MMT) strategic petroleum reserve at Mangaluru in Karnataka, marking the first time the country's largest explorer will fund the creation of a strategic crude storage facility.

The company's board has accorded an in-principle approval for the Phase-I expansion of the Mangaluru strategic petroleum reserve project, along with associated facilities, in line with directions from the Ministry of Petroleum and Natural Gas, ONGC said in a regulatory filing on Thursday.

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The project will add 1.75 MMT of storage capacity to India's strategic petroleum reserve network, which is managed by Indian Strategic Petroleum Reserves Ltd. (ISPRL). India currently has 5.33 MMT of strategic crude storage across underground caverns at Visakhapatnam, Mangaluru and Padur, enough to meet about 9.5 days of the country's crude oil requirement based on 2019-20 consumption patterns, according to government data.

The expansion comes as India steps up efforts to strengthen its energy security after recent geopolitical disruptions exposed the vulnerability of global oil supply chains.

The near-total closure of the Strait of Hormuz during the Iran conflict underscored the need for larger strategic crude inventories for import-dependent countries such as India.

Mangaluru already serves as a key strategic oil storage hub for India, with ONGC subsidiary Mangalore Refinery and Petrochemicals Ltd. (MRPL) operating a 300,000-barrel-per-day refinery at the site. Existing underground caverns there have been leased to international firms, including Abu Dhabi National Oil Co. (ADNOC), allowing India to combine strategic storage with commercial utilisation.