Land acquisition for SPR expansion projects at advanced stage: Govt

Government says land acquisition for strategic petroleum reserve projects in Odisha and Karnataka is progressing, as energy security gains focus amid global uncertainties

The process of land acquisition for two major expansion projects of India’s Strategic Petroleum Reserves (SPRs) in Odisha and Karnataka is currently at an advanced stage, the Ministry of Petroleum and Natural Gas (MoPNG) has said. The ongoing West Asia crisis has highlighted the need for India to establish sufficient SPRs to manage energy shocks.

 

"Land acquisition at Padur (near Udupi) is almost at completion stage, along with the finalisation of rate and acreage of land at Chandikhol in Odisha," the ministry told the parliamentary standing committee on petroleum and natural gas in response to queries on the status of work. 

 

It added that land acquisition at Chandikhol is at an advanced stage. The Odisha government has sanctioned 400 acres of land for the project, and India Strategic Petroleum Reserves Ltd (ISPRL) has received the demand note for 363.3 acres. "The demand note for the remaining 36.7 acres is expected to be received shortly," the ministry said. 

ISPRL has established SPR facilities with a total capacity of 5.33 million tonnes (MT) of crude oil at Visakhapatnam in Andhra Pradesh and Mangalore and Padur in Karnataka, which can act as a buffer for short-term supply shocks. These SPRs provide for around 9.5 days of crude oil requirement.

 

"The current total national capacity for storage of crude oil and petroleum products is 74 days, which includes storage facilities of the oil marketing companies (OMCs) of 64.5 days," Minister of State for petroleum and natural gas Suresh Gopi said in a written reply in Parliament on Thursday. He added that the actual reserve is a dynamic number depending on stocks and actual consumption, both of which are not static.

 

The government approved the establishment of two additional commercial-cum-strategic petroleum reserve facilities with a total storage capacity of 6.5 MT at Chandikhol in Odisha and Padur in Karnataka in July 2021, on a public-private partnership mode, with a total project cost of ₹14,527 crore and viability gap funding capped at 60 per cent of the total project cost.

 

The committee asked the ministry for the reason behind the reduction in the outlay for the projects from ₹100 crore in the Budget Estimate of 2025–26 to ₹20 crore in the revised estimate. The ministry replied, "the fund requisition for land acquisition at RE stage was reduced to tentative rate presumed at BE stage. As per demand letter received from M/s IDCO, total estimated cost of 400 acres land at Chandikhol will be ₹23 crore."

 

The membership criteria of the International Energy Agency (IEA) requires member countries to maintain crude oil and product reserves equivalent to 90 days of the previous year’s net imports, to which the government has immediate access.