India Seeks Private Investors for $910 Million Oil Reserve

India is looking for private investors to build and operate the nation’s largest strategic petroleum reserve site, which will boost India’s SPR capacity by 80% and cost an estimated $910 million, local media reported on Friday, citing tender documents.

The proposed SPR site will be located at Chandikhol in the eastern Indian state of Odisha on the Bay of Bengal, and will be capable of holding up to 4 million tons of crude oil.

The Indian government is offering a grant of $546 million (51.4 billion Indian rupees) to support private investment in the facility, The Economic Times reports.

Bids must be submitted by February 26, 2027, according to the terms of the tender.

Currently, India’s underground Strategic Petroleum Reserve storage has a total capacity of 5.33 million metric tons of crude oil, equal to only 39 million barrels of crude oil, or eight days’ worth of India’s oil consumption.

India’s SPR expansion was a strategic priority even before the Strait of Hormuz was closed, but following the supply disruption early this year, the world’s third-largest crude oil importer accelerated plans to build strategic reserve sites.

For example, state-owned Oil and Natural Gas Corporation (ONGC), India’s top explorer, will build a new storage site at Mangaluru to hold about 13 million barrels of oil.

In the wake of the Iran war and the disrupted crude flows at the Strait of Hormuz, India found itself in search of alternatives to replace the lost Middle Eastern supply. Record crude oil imports from Russia have helped cushion the blow, but India realized it needs additional storage sites to hold commercial and strategic reserves.

India is one of the biggest crude oil importers, but also one of the most exposed to supply shocks, as its current maximum reserve capacity can cover only eight days of national oil demand.

Source: Oilprice