ONGC Directs Mangaluru Underground Cavern Construction
Asian economies are accelerating strategic oil and gas storage capacity expansions in response to recent global supply disruptions and the Iran-related conflict centered around the Strait of Hormuz, according to regional energy reports. In India, the government has directed state-owned Oil and Natural Gas Corporation (ONGC) to construct a new underground Strategic Petroleum Reserve cavern at Mangaluru, Karnataka, adding 1.75 million metric tons (MMT) of crude oil storage capacity, according to public sector project filings.
Arun Kumar Singh, Chairman of Oil and Natural Gas Corp. (ONGC), stated on Monday that the state-run producer will invest 70 billion rupees to develop underground storage in southern India, with land acquired and construction starting soon. Regarding the financial scope, a discrepancy exists in reported estimates, as separate sources cite the project cost at around $1.6 billion while official corporate disclosures record the outlay at 70 billion rupees, equivalent to $736 million. The Mangaluru project will increase India's dedicated strategic petroleum reserve infrastructure by approximately one-third, per Ministry of Petroleum and Natural Gas documents.
Phase-II Expansion Targets 11.83 MMT Total Capacity
India's existing strategic petroleum reserve facilities, located at Visakhapatnam, Mangaluru, and Padur, currently hold a total capacity of 5.33 MMT of crude oil, providing roughly 8 to 10 days of import coverage based on India's daily consumption of 5.3 to 5.5 million barrels per day, according to data from the Petroleum Planning and Analysis Cell. Minister of State for Petroleum and Natural Gas Suresh Gopi confirmed in a written reply to the Lok Sabha that the Phase-II expansion, approved in July 2021, will add 6.5 million tonnes of commercial-cum-strategic crude oil storage capacity.
The Phase-II development includes new facilities at Chandikhol in Odisha, which will provide 4 MMT of storage, and Padur in Karnataka, which will add 2.5 MMT. Once completed, these additions will bring India's total strategic crude storage capacity to 11.83 MMT. According to energy sector projections, this expanded inventory is projected to provide closer to 15 to 22 days of crude oil import coverage.
International Collaborations and Global Comparisons
In addition to domestic state-funded construction, a strategic collaboration agreement was signed in May 2026 between Indian Strategic Petroleum Reserves Limited (ISPRL) and Abu Dhabi National Oil Company (ADNOC) to explore expanding ADNOC-linked crude storage in India up to 30 million barrels, per official ministry announcements. Despite these ongoing expansions, India's current dedicated strategic petroleum reserve remains modest compared to major global players and sits well below the International Energy Agency recommended 90-day import coverage target, highlighting the ongoing urgency of infrastructure development.
For comparative context, India's current strategic reserve capacity of 5.33 MMT, representing approximately 39 million barrels, stands significantly below international peers, according to global energy database records. The United States Strategic Petroleum Reserve holds 340 million barrels against an authorized capacity of 714 million barrels. China maintains nearly 1.4 billion barrels in combined strategic and commercial inventories as of late 2025, with government-held portions accounting for approximately 360 million barrels. Japan maintains around 263 million barrels of government strategic inventories.
Downstream Stakes for National Energy Security
For India, operating as the world's third-largest oil consumer while importing over 85 to 90 percent of its crude needs, the expansion of strategic reserves aims to reduce direct vulnerability to global supply disruptions and stabilize domestic energy import bills, per energy ministry briefings. The increased storage capacity will enhance national energy security and is projected by market analysts to contribute to calmer global oil markets by reducing the necessity for panic spot purchases during regional transit blockages.
