India, the world’s third-largest oil consumer and importer, is embarking on the construction of its first commercial crude oil strategic storage facility. The move aims to bolster stockpiles as a precautionary measure against potential supply disruptions.
The project, overseen by the Indian Strategic Petroleum Reserves Ltd (ISPRL), involves the construction of 2.5 million tonnes of underground storage at Padur in Karnataka. This initiative is part of the government’s efforts to enhance energy security.
ISPRL has issued tenders inviting bids for the construction, with the project estimated to cost ₹5,514 crore. The storage facility will be developed as a public-private partnership (PPP) model, where private entities will handle the design, construction, financing, and operation of the storage.
Bidders have been asked to quote financial grants or premium/fee offers for the project, with the award going to the entity providing the highest premium or the lowest grant. The maximum grant for the project is capped at ₹3,308 crore.
The Padur-II storage facility will enable oil companies to lease storage space and sell oil to domestic refiners, with India retaining priority access to oil reserves in case of emergencies.
In the first phase, ISPRL constructed strategic petroleum reserves with a total capacity of 5.33 million tonnes at three locations. These reserves were built at government expense, while the upcoming Padur-II project marks the entry into commercial strategic storage development.
Notably, Abu Dhabi National Oil Company (Adnoc) has already leased storage space in some of the Phase-I reserves. The government has allowed Adnoc to export crude oil stored in the Mangalore reserves to enhance operational flexibility, a move aimed at optimizing the utilization of strategic storage facilities.
The development reflects India’s strategic approach to energy security and its efforts to diversify storage options while leveraging private sector participation in infrastructure development.
For more updates follow our Whatsapp 
and Telegram Channel 
