ONGC will add 13 mn bbl strategic petroleum reserve at its Mangalore petrochemicals hub

ONGC adds Mangalore reserve: Indian state-owned energy company Oil and Natural Gas Corporation (ONGC) secured approval to develop a 1.75 mn metric ton — equivalent to 13 mn barrels of crude oil — strategic petroleum reserve, according to an exchange filing (pdf). The project will be developed at ONGC’s Mangalore petrochemical facility near India’s western coast.

The Gulf angle: The project builds on India’s UAE-linked oil reserve, with Abu Dhabi National Oil Company already storing crude oil at the existing Mangalore strategic reserve. New Delhi is eyeing expanding Abu Dhabi-linked storage in India to as much as 30 mn barrels, along with possible storage access at Fujairah.

Project status: The approval was granted at ONGC’s board meeting last week, followed by a green light from the Petroleum and Natural Gas Ministry, which administers the energy company.

Commercial use: The board also directed to broaden the commercial use of the reserve with regulatory support from the Indian government. That means the project could be structured not only as emergency crude storage, but also with some commercial-use flexibility, if the government approves.

Remember: The expansion comes after ONGC’s MRPL refinery was forced to shut a 100k bbl / d refining unit and some secondary units — including a hydrocracker — in March due to crude shortages as Hormuz disruptions made prompt replacement cargoes harder to secure. MRPL had also suspended refined fuel exports during the conflict, underscoring the case for an expanded crude storage near the refinery.