India's crude security is set for a significant boost, with its strategic petroleum reserves likely to increase by nearly 70% from the current 5.3 million tonnes. This follows an agreement by the UAE's Abu Dhabi National Oil Company (ADNOC) to ramp up crude oil storage in India to as much as 30 million barrels.
Current and Expanded Storage Capacity
Officials confirmed that the UAE already has leased storage capacity at Mangalore, where it holds nearly 6 million barrels (around 800,000 tonnes) of crude. Expanding this to 30 million barrels will add over 4 million tonnes to India's overall strategic reserves. India currently maintains a strategic petroleum reserve of 5.3 million tonnes (MT) at Visakhapatnam, Mangalore, and Padur, equivalent to roughly 38 million barrels.
Phase II and LPG Reserves
Under Phase II, the Indian government approved in July 2021 the establishment of two additional commercial-cum-strategic reserves with a capacity of 6.5 MT at Chandikhol in Odisha and Padur under a public-private partnership (PPP) mode. India is also exploring the creation of a 20-30 day strategic reserve for liquefied petroleum gas (LPG).
Geopolitical Context and Energy Cooperation
The agreement between ADNOC and Indian Strategic Petroleum Reserves Limited comes amid disruptions in energy supplies due to the West Asia conflict. India and the UAE have also signed agreements to explore LNG and LPG storage possibilities in India, as well as crude storage in Fujairah as part of India’s strategic petroleum reserve. The UAE ranks among the top five suppliers of crude to India and holds long-term contracts for LPG and natural gas.
UAE's Production Plans
The UAE recently announced its exit from OPEC and plans to ramp up production without being constrained by quotas. Currently producing about 3-3.2 million barrels per day (mbd), the UAE aims to increase output to 5 mbd by 2027 and monetise its reserves.
LPG Supply Expansion
ADNOC has also signed an agreement with Indian Oil Corporation to expand LPG supply and trading opportunities for cooking gas in India. Officials stated that the deal extends an existing LPG term contract signed in 2023 and is likely to support a long-term LPG sale and purchase agreement.
