India's top explorer Oil and Natural Gas Corp ONGC.NS will build a 1.75 million metric ton (MT) national strategic petroleum reserve in Mangalore in southern India, the company said in a stock exchange filing late Thursday.
India, the world's third biggest oil importer and consumer, was hit hard by the blockade of the Strait of Hormuz after Israel-U.S. attacks on Iran. About a fifth of the world's energy supplies pass through the waterway.
The South Asian nation is enhancing its energy cooperation with countries, including the United Arab Emirates and Japan, to strengthen its emergency stockpile.
ONGC would seek the federal government's permission for commercial use of the storage to be built in "national interest", it said in the filing.
New Delhi already allows commercial use of a part of its strategic storage built at three locations - Mangalore, Padur and Vizag - in southern India to store up to 5.33 MT of crude. These storage facilities are managed by the government-owned Indian Strategic Petroleum Reserves Ltd.
Mangalore Refinery and Petrochemicals Ltd MRPL.NS, a subsidiary of ONGC, operates a 300,000 barrel per day refinery in Mangalore. It has already leased half of the 1.5 MT Mangalore SPR, while the remaining capacity is leased to Abu Dhabi National Oil Co. of the UAE.
During Indian Prime Minister Narendra Modi's visit to the UAE earlier this year, ADNOC announced plans to increase crude oil storage in India to up to 30 million barrels.
ADNOC also announced that the UAE would explore potential crude storage at Fujairah as part of India's strategic reserve.
India also plans to build 4 MT of strategic storage at Chandikhol in the eastern state of Odisha and a new 2.5 MT facility at Padur in southern India.
(Reuters - Reporting by Nidhi Verma; Editing by Rashmi Aich)
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