After seven years in files, India's largest strategic petroleum reserve is finally moving from blueprint to bidding.
Indian Strategic Petroleum Reserves Ltd (ISPRL) has floated tenders to build a 4-million-tonne underground rock cavern facility at Chandikhol in Jajpur district, Odisha, at an estimated cost of Rs 8,571 crore. It will be India's fourth and largest SPR, increasing existing 5.33 MT capacity at Visakhapatnam (1.33 MT), Mangaluru (1.5 MT) and Padur (2.5 MT) by 80%.
The timing is strategic. India imports 85% of its oil, and disruptions in Strait of Hormuz during West Asia conflict this year sent Brent to $92 and exposed how thin India's buffer is. Current SPRs cover just ∼9.5 days of demand; with oil marketing companies storage, total is ∼74 days. Chandikhol alone adds 7.12 days. Once Chandikhol and the planned 2.5 MT expansion at Padur, Karnataka are done, strategic cover rises from 10 days to about 21 days.
Read more - IMF To India: Want 6.8% Growth? Create Real Jobs
Cabinet approved Chandikhol in June 2018 along with Padur expansion, but land acquisition of 400 acres in Dankari hills and illegal stone quarrying stalled it. Odisha government finally executed lease deed in April 2026 after an MoU between IPICOL, ISPRL and state. Engineers India Ltd has frozen design; project includes onshore pipeline to Paradip Port (80 km away) and offshore Single Point Mooring for crude transshipment.
Financing model is new. Instead of full budget, Centre will offer Viability Gap Funding up to 60% — Rs 5,142 crore — under PPP, awarding contract to bidder seeking lowest grant. Bids due Feb 26, 2027. This follows May 2026 India-UAE pact where ADNOC agreed to store up to 30 million barrels in Indian SPRs, including Chandikhol.
Simultaneously, ISPRL wants to lease out 0.524 MT — half — of Visakhapatnam cavern for three years (extendable by four) to monetize existing asset. ONGC has also been asked to develop 1.75 MT storage at Mangaluru.
Read more - Moody's Keeps India At 7%: Consumption Strong, Capex Coming
The strategic logic goes beyond oil prices. US tariffs, Red Sea shipping risks, and Hormuz chokepoint make energy security national security. US SPR holds ∼700 million barrels. China has 1,200 million barrels capacity. India, world's third-largest consumer, had only 38 million barrels till now.
Chandikhol is not just an oil tank. It is India's insurance policy — underground, bomb-proof, market-linked, and for the first time, private-investor led.
#StrategicPetroleumReserve #Chandikhol #Odisha #EnergySecurity #ISPRL #CrudeOil #Hormuz #OilReserve #IndiaEnergy #Petroleum