India is planning to build two additional commercial-cum-strategic petroleum reserve facilities (SPR) under a public-private partnership (PPP) model at an estimated project cost of ₹14,527 crore as part of strengthening its energy security.

The viability gap funding (VGF), — a government assistance provided to make essential, economically beneficial infrastructure projects commercially feasible — has been capped at 60% of the total project cost, Suresh Gopi, Minister of State for Union Petroleum Ministry stated in response to a query at the Lok Sabha.

“For development of SPR facilities under Phase-II, a PPP model is envisaged with a total project cost of ₹14,527 crores with the VGF by Government capped at 60% of the total project cost,” he said.

In July 2021, the union government had approved the establishment of the reserve facilities that are to add 6.5 million metric tonnes (MMT) of storage capacity – inclusive of 4 MMT in Odisha and 2.5 MMT in Karnataka.

Mr. Gopi also informed that “assessment of new sites for establishment of additional SPRs is a continuous process.”

The Union Govt, through the Indian Strategic Petroleum Reserve Ltd (ISPRL) had established SPR facilities with a cumulative capacity of 5.33 MMT of crude in Vishakhapatnam (1.33 MMT), Mangaluru (1.5 MMT) and Padur (2.5 MMT).

“The construction and commissioning of these caverns in Phase-I was completed between 2016 and 2018,” Mr. Gopi informed.