ONGC board approves 1.75 million ton expansion of India’s strategic crude oil reserves in Mangalore

India’s largest state-owned oil-and-gas producer is making a serious bet on energy security. On Friday, the board of Oil and Natural Gas Corp. approved adding 1.75 million tons of storage capacity at Mangalore, Karnataka — a move ONGC described in its filing as a project of “national importance.”

ONGC approves Mangalore capacity addition

The ONGC board formalized the decision in a Friday regulatory filing, adding 1.75 million tons of crude storage to the Mangalore site in Karnataka. The company called it a project of “national importance”—language that signals strategic weight, not routine infrastructure planning.

Cost and completion timeline weren’t disclosed. For projects like this, procurement and construction schedules tend to stay fluid during early approval stages. That’s not unusual.

New capacity will be managed by ISPRL and will complement both existing and under-construction sites, all moving India toward its one-month demand coverage target.

What ONGC did confirm: associated facilities will also be developed at the site, in line with directives from the Ministry of Petroleum and Natural Gas. The ministry’s involvement makes clear this is a coordinated national policy move—not a standalone corporate call.

Iran conflict and Hormuz closure drove the decision

The backdrop here is hard to miss. The near-total closure of the Strait of Hormuz during the Iran conflict sent shockwaves through global energy markets, and India felt it acutely.

India is one of the world’s largest crude oil and natural gas importers, with the Persian Gulf supplying a significant share of those volumes. When Hormuz effectively shut down, Indian importers scrambled to find alternative supply routes — a painful exercise that exposed just how thin the country’s strategic stockpile buffer really was. The crisis accelerated conversations that had been simmering for years about reserve adequacy, pushing the government to look beyond its usual funding channels.

That’s what makes ONGC’s move notable. It’s the first time a government-owned company has committed its own funds—rather than relying on state refiners—to build out strategic reserves. This approval crosses a line that hadn’t been crossed before.

Impact on India’s strategic petroleum reserve network

Once built, the new Mangalore capacity will be managed by Indian Strategic Petroleum Reserves Ltd., the state entity responsible for India’s national stockpiles. ISPRL currently operates underground caverns at three sites across India’s east and west coasts, with a combined capacity of 5.33 million tons.

That number is already growing. Two additional sites under construction will add another 6.5 million tons when complete, and the ONGC-backed Mangalore expansion layers on top of that. The government’s stated target is reserves large enough to cover up to 90 days of net imports—for crude oil, liquefied natural gas, and liquefied petroleum gas. Hitting that target takes sustained investment across multiple sites and funding sources, which is part of why ONGC’s direct participation matters.

Reaching a full month of coverage is ambitious. It’s not just about building caverns—you have to fill them and keep them filled. The Hormuz disruption made the cost of falling short very concrete.

Mangalore site context and broader policy framework

The Mangalore location isn’t starting from scratch. ONGC’s subsidiary, Mangalore Refinery and Petrochemicals Ltd., already runs a 300,000-barrel-a-day refinery in Karnataka. That proximity creates a logical operational link — ONGC could use the new caverns alongside MRPL for storage and supply management, though no formal arrangement has been announced.

The existing Mangalore caverns have drawn international interest too. Abu Dhabi National Oil Co., the UAE’s largest oil company, is among the foreign firms that have already leased space there—reflecting a broader government strategy of using public-private partnerships to spread the financial burden of reserve expansion. Authorities have also directed state-run producers and refiners to expand their own commercial reserves and contribute to strategic stockpile development. ONGC’s approval fits squarely within that framework.

The Mangalore site already hosts refining operations

India’s strategic petroleum reserve network is expanding on several fronts at once. ONGC’s board approval adds 1.75 million tons of crude storage at Mangalore, framed as nationally important and backed by the company’s own funds — a first for a government-owned Indian oil producer.

The decision follows the energy disruption triggered by the near-total closure of the Strait of Hormuz during the Iran conflict, an event that exposed India’s vulnerability as a major Gulf energy importer. New capacity will be managed by ISPRL and will complement both existing and under-construction sites, all moving India toward its one-month demand coverage target. Cost and timeline details remain undisclosed.

The Mangalore site already hosts refining operations through MRPL and has attracted international lease agreements from companies like ADNOC. Future development will follow Ministry of Petroleum and Natural Gas directives, with associated facilities to be built alongside the new storage caverns.

Kelly Lippke

Kelly is an experienced writer with 15 years of experience exploring the big stories that shape our world, from tech breakthroughs and space exploration to climate, energy, and the fascinating quirks of science. She has a talent for turning complex ideas into sharp, memorable insights that stay with readers long after they’ve finished reading.