India's ONGC plans to build 13 million bbl national strategic oil reserve
- India is being hit hard by the blockade of the Strait of Hormuz amid the Iran war
NEW DELHI: India’s Oil and Natural Gas Corp will build a 1.75 million metric ton (about 13 million barrels), strategic petroleum reserve in Mangalore in southern India, the company said in a stock exchange filing late on Thursday.
India, the world’s third biggest oil importer and consumer, was hit hard by the blockade of the Strait of Hormuz during the Iran war. About a fifth of the world’s energy supplies pass through the waterway.
India is enhancing its energy cooperation with countries, including the United Arab Emirates and Japan, to strengthen its emergency stockpile.
ONGC, India’s top oil exploration company, would seek the federal government’s permission for commercial use of the storage to be built in the “national interest”, it said in the filing.
New Delhi already allows commercial use of a part of its strategic storage built at three locations - Mangalore, Padur and Vizag - in southern India to store up to 5.33 MT of crude.
These storage facilities are managed by the government-owned Indian Strategic Petroleum Reserves Ltd.
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ONGC has not specified the cost and time for completion of the new SPR facility at Mangalore.
India’s current strategic stockpiles are a fraction of its 5.2 million barrels per day refining capacity.
Mangalore Refinery and Petrochemicals Ltd, a subsidiary of ONGC, operates a 300,000 bpd refinery in Mangalore. It has already leased half of the 1.5 MT Mangalore SPR, while the remaining capacity is leased to Abu Dhabi National Oil Co. of the United Arab Emirates.
During Indian 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 announced that the UAE would explore potential crude storage at Fujairah as part of India’s strategic reserve.
India also plans to build about 4 MT of strategic storage at Chandikhol in the eastern state of Odisha and a new 2.5 MT facility at Padur in southern India.
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