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New Delhi: With the US-Iran war continuing to block oil shipments from the Middle East, India has moved ahead to fast track the long delayed plan for a massive underground crude oil storage facility in Odisha. The project, which was buried in red tape for nearly seven years due to administrative hurdles, is now being treated as a matter of national security.
A ₹8,743 Crore Fortress for Crude
The Strategic Petroleum Reserve (SPR) at Chandikhol will become the world’s largest underground crude oil storage reserve. The project will cost ₹ 8,743 crores and have the capacity to hold 4 million metric tonnes of crude oil.
At present, India’s SPR is divided in three locations- Visakhapatnam (1.33 MT), Padur (2.5MT) and Mangaluru (1.5 MT). Collectively, these facilities can meet about 10 days of the demands, even as the government aims to expand this with another SPR in Padur as well.
Such crude oil reserves act as a strategic buffer in case of challenges with timely supplies, as any delay in supplies can mean a knock down effect on inflation and law and order situation.
With almost 85% of our crude oil coming from the Middle East, the ongoing war could become a challenge, even as other major economies- including China and the US- continue to use their SPRs in case of such challenges.
The United States’ Strategic Petroleum Reserve (SPR) remains the world’s largest, holding crude oil across Louisiana and Texas collectively, although China has also been aggressively expanding its own stocks.
Besides the SPR, the Chandikhol project will also be connected to the Paradip offshore oil terminal to facilitate crude transshipment. There are also plans to integrate it with the pipeline network of the Indian Oil Corporation.
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