India's state-owned Oil and Natural Gas (ONGC) is set to add 1.75mn t (12.83mn bl) of strategic petroleum reserve capacity to the country's existing reserves in Mangalore, strengthening overall oil storage to cushion against supply shocks in future.
The addition will be above Mangalore's existing 1.5mn t underground cavern managed by Indian state-run Strategic Petroleum Reserves (ISPRL), the firm said in an exchange filing on 9 July, and this will take the total capacity in the region to 3.25mn t (23.8mn bl).
The company further added that the new project is of "national importance," and is being developed in accordance with directives from the oil ministry.
ONGC is set to invest its own capital as part of the project, in contrast to state-owned refiners only building commercial storage previously.
But the timeline and the nature of procurement for filling the reserve is still uncertain.
New Delhi has been mulling increasing the country's crude and LPG reserves to meet at least a month's worth of domestic demand after supply shocks emerged because of the de facto closure of the strait of Hormuz.
Abu Dhabi's state-owned Adnoc is also looking to double its crude storage in India, to up to 4mn t (30mn bl), as part of a collaboration with ISPRL.
Adnoc has nearly 2.05mn t of crude storage in India that includes 800,000t in Mangalore and 1.25mn t in Padur underground storage.
