The Government of India has announced plans to develop the second phase of its Strategic Petroleum Reserve (SPR) programme at an estimated cost of ₹14,527 crore under a Public-Private Partnership (PPP) model. The expansion is aimed at strengthening the country’s energy security by creating additional emergency crude oil storage capacity while encouraging private sector participation.

The Phase II project, approved in July 2021, will add 6.5 million tonnes of commercial-cum-strategic crude oil storage capacity through two new underground facilities. Of this, 4 million tonnes will be developed at Chandikhol in Odisha and 2.5 million tonnes at Padur in Karnataka. The government will provide viability gap funding of up to 60 percent of the total project cost, with private partners responsible for developing and operating the facilities.

India currently operates strategic petroleum reserves with a total capacity of 5.33 million tonnes at Visakhapatnam, Mangaluru and Padur, commissioned between 2016 and 2018 through Indian Strategic Petroleum Reserve Limited (ISPRL). The new expansion will more than double the country’s strategic crude storage capacity, enhancing its ability to respond to global oil supply disruptions and price volatility.

Minister of State for Petroleum and Natural Gas Suresh Gopi, in a written reply to the Lok Sabha, said the government is also continuously assessing additional locations for future strategic petroleum reserves. He noted that the Phase II programme is designed to improve India’s preparedness for geopolitical uncertainties while ensuring a stable supply of crude oil for domestic refineries.

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Energy experts believe the expansion represents another significant step towards strengthening India’s long-term energy security. By combining public investment with private participation, the project is expected to build a more resilient oil storage infrastructure, reduce risks arising from international supply disruptions and support the country’s growing energy demand in the years ahead.

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