Strategic Petroleum Reserves (SPR): Where is India Storing Its Emergency Oil?

India is the world’s third largest oil consumer after the US and China. To moove its economy nmoving forward by importing roughly 88% of its crude oil requirements because the country relies so heavily on global supplies. It is highly vulnerable to geopolitical shocks, regional conflicts, and trade route disruptions.

Strategic Petroleum Reserves (SPR)

The Strategic Petroleum Reserves (SPR) managed by the Indian Strategic Petroleum Reserves Limited (ISPRL). It is a special purpose vehicle under the Ministry of Petroleum and Natural Gas, oil reserves function as a massive safety net against sudden supply crunches and price shocks. 

India stores its sovereign crude oil deep inside underground rock caverns. These reserves are man-made spaces carved into unlined and solid rock formations deep beneath the earth.

Hydrocarbon experts consider rock caverns the safest and most economical way to store crude oil. They are naturally protected from external security threats like aerial attacks, sabotage, or industrial accidents, and they present a significantly lower risk of catching fire compared to surface storage.

Phase I: India’s Existing Emergency Depots

Under Phase I of the SPR program, the government of India built a total storage capacity of 5.33 Million Metric Tonnes (MMT) across three critical coastal locations. These facilities provide an independent buffer of about 9.5 days of national crude demand.

1. Visakhapatnam (Andhra Pradesh)

• Capacity: 1.33 MMT

• Significance: Located on India’s eastern coast, this cavern was the first to be commissioned (June 2015) to maximize efficiency, a 0.3 MMT compartment within this facility is shared with Hindustan Petroleum Corporation Limited (HPCL) for regular refinery operations.

2. Mangaluru (Karnataka)

• Capacity: 1.50 MMT

• Significance: Commissioned in October 2016 on the western coast in an effort to commercialize storage space, India signed an agreement allowing the Abu Dhabi National Oil Company (ADNOC) of the UAE to utilize a 0.75 MMT compartment within this cavern.

3. Padur (Karnataka)

• Capacity: 2.50 MMT

• Significance: Located near Udupi in Karnataka, Padur is currently the largest operational underground storage unit in India. 

Phase II: Expanding for the Future

Recently the Union Cabinet approved a massive Phase II expansion plan after the Middle East crisis especially near critical chokepoints like the Strait of Hormuz. 

The governmnet Phase II introduces a commercial-cum-strategic model built on a Public-Private Partnership (PPP) framework, which will add an additional 6.5 MMT of storage volume at a project cost of ₹14,527 crores:

• Chandikhol (Odisha): A brand new 4.0 MMT underground rock cavern facility.

• Padur Phase II (Karnataka): An additional 2.5 MMT storage expansion built right next to the existing site.

Once Phase II is completed and operational, India's total dedicated SPR capacity will scale up to 11.83 MMT, expanding the country's independent emergency crude cover to roughly 22 days.

Current Status: How Full is India's Oil Storage?

According to official data presented by the Ministry of Petroleum and Natural Gas to the Rajya Sabha, the utilization of these caverns fluctuates based on global market dynamics.

Note: India's SPR cover provide roughly 9.5 days of standalone buffer at 100% capacity which stands at 74 days when combined with the commercial storage units by Oil Marketing Companies (OMCs) which keeps India well within striking distance of the International Energy Agency's (IEA) recommended 90-day benchmark.

India, the world's third-largest oil consumer, relies on Strategic Petroleum Reserves (SPR) in underground rock caverns to mitigate supply disruptions. Managed by ISPRL, these reserves are expanding from Phase I's 5.33 MMT to 11.83 MMT in Phase II, significantly boosting the nation's emergency oil cover.

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