Archive · 24 Jul 2026
India Expands Strategic Oil Reserves Under PPP Model
India is planning to build more storage for oil to keep the country safe from any sudden shortages.
They are going to spend a lot of money, about Rs 14,527 crore, to build these new storage places in Odisha and Karnataka.
The government will help pay for it, but private companies will also be involved.
This is like having a big savings account for oil.
India already has some of these storage places, and they are working with a company from the United Arab Emirates to use one of them.
The government is also trying to get oil from more countries so they are not too dependent on just a few.
They are also promoting other types of fuel to use less oil.
India plans to develop Phase-II strategic petroleum reserves with 6.5 million tonnes capacity under PPP model.
Estimated cost of Rs 14,527 crore with government viability gap funding capped at 60%.
Phase-II facilities to be built in Odisha (4 million tonnes) and Karnataka (2.5 million tonnes).
Phase-I facilities with 5.33 million tonnes capacity already established in Visakhapatnam, Mangaluru, and Padur.
ISPRL has entered into an agreement with ADNOC for using a 750,000 tonne cavern at Mangaluru.
- Who
- Indian Government, Ministry of Petroleum and Natural Gas, Abu Dhabi National Oil Company (ADNOC)
- What
- Development of Phase-II strategic petroleum reserves under PPP model
- When
- Phase-II approved in July 2021, Phase-I facilities commissioned between 2016 and 2018
- Where
- India (Odisha, Karnataka, Visakhapatnam, Mangaluru, Padur)
- Why
- To strengthen energy security and reduce supply risks
Government Perspective
Private Sector Perspective
Funding Model
Government Perspective
The government supports the PPP model with viability gap funding capped at 60% of the total project cost.
Private Sector Perspective
Private sector seeks to minimize government funding and maximize their share of the project cost.
Energy Security
Government Perspective
The government aims to strengthen energy security and reduce supply risks by diversifying crude oil sourcing and promoting alternative fuels.
Private Sector Perspective
Private sector focuses on commercial viability and profitability of the strategic petroleum reserves.
- Estimated Cost
- Rs 14,527 crore
- Storage Capacity
- 6.5 million tonnes
- Locations
- Odisha (4 million tonnes), Karnataka (2.5 million tonnes)
- Phase-I Capacity
- 5.33 million tonnes
- Government Funding
- 60% of total project cost
- ADNOC Agreement
- 750,000 tonne cavern at Mangaluru
- Crude Oil Sourcing
- 41 countries
- LNG Sourcing
- 15 countries