ONGC to develop 1.7 MT strategic oil reserve in Mangaluru

NEW DELHI: State-run Oil and Natural Gas Corporation (ONGC) will develop a 1.7 million tonne (MT) strategic crude oil reserve in Mangaluru in Karnataka, as India looks to strengthen its energy security against future supply disruptions amid an increasingly uncertain global geopolitical situation.The company, in a regulatory filing, said its board met late on Thursday and approved the proposal to develop the strategic reserve and associated facilities as a project of national importance, following directions from the ministry of petroleum and natural gas.Under Phase-I, India developed 5.3 MT of strategic crude reserves across three underground facilities -- Mangaluru (1.5 MT), Padur (2.5 MT) in Karnataka and Visakhapatnam (1.3 MT) in Andhra Pradesh -- to safeguard the country against global supply disruptions.

The capacity is estimated to meet about 9.5 days of the country’s crude oil requirement. The reserves are managed by Indian Strategic Petroleum Reserve Limited (ISPRL), a special purpose vehicle set up by the Centre.The govt is expanding the strategic petroleum reserves by adding 6.5 million tonnes (MMT) of crude oil storage in Chandikhol in Odisha and Padur in Karnataka under Phase-II of the ISPRL programme. The new reserve proposed by ONGC will add storage equivalent to nearly three days of the country’s crude oil requirement.

As per govt, India maintains crude oil, petrol and diesel stocks sufficient for nearly 74 days, including about nine days’ worth of strategic reserves stored in underground caverns, besides stocks held at ports, refineries, pipelines, terminals and depots.The ONGC board has also asked the company to approach central govt to broaden commercial utilisation of the strategic reserve by seeking necessary regulatory provisions.

Govt has already permitted partial commercial use of its existing underground strategic petroleum reserves to reduce storage costs. It, however, retains the “first right” to use all stored oil during a national energy emergency, an official said.Drawing lessons from the recent disruptions in energy supplies arising from the West Asia crisis, petroleum minister Hardeep Singh Puri earlier this month said there was a need to build more storage and that India had intensified outreach to bilateral partners to expand its strategic reserve capacity.UAE’s Abu Dhabi National Oil Co (ADNOC) signed an agreement with ISPRL in May to increase its crude oil storage in India to 30 million barrels (about 4.1 million tonnes), from the existing 5.9 million barrels.