ADNOC explores expanded LPG supply and strategic petroleum storage partnership with ISPRL
Worth reading — New development — a live issue with two sides, good for Mains, no past question yet.
2-minute summary
Abu Dhabi National Oil Company (ADNOC) is in advanced discussions with Indian Strategic Petroleum Reserves Limited (ISPRL) to expand long-term energy supplies and strategic crude oil, LNG, and LPG storage facilities in India. In 2025, ADNOC supplied over 500,000 barrels of crude oil per day to India, accounting for nearly 10% of India's total crude imports. The ongoing talks explore expanding India's strategic crude oil storage capacity to as much as 30 million barrels, incorporating existing facilities in Mangaluru and potential new caverns in Visakhapatnam and Chandikhol. Additionally, the collaboration builds upon recent high-level bilateral agreements signed during Prime Minister Narendra Modi's visit to the UAE, aiming to secure long-term liquefied petroleum gas (LPG) and liquefied natural gas (LNG) supplies. The partnership highlights the strategic energy interdependence between India and the UAE, enhancing India's energy security framework through robust commercial and infrastructural alliances.
Why it's in the news
ADNOC's Acting CEO of Downstream, Nasser Omair Al Muhairi, announced ongoing high-level negotiations with ISPRL to expand long-term LPG supply agreements and scale up strategic petroleum and gas storage capacity in India up to 30 million barrels.
Facts to remember
- ADNOC supplied over 500,000 barrels of crude oil a day to India in 2025, accounting for almost one in ten barrels of India's crude imports.
- Indian Strategic Petroleum Reserves Limited (ISPRL) manages India's emergency crude oil storage facilities.
- Current strategic crude oil storage in India includes facilities in Mangaluru with a capacity of 5.86 million barrels.
- Potential new strategic reserve facilities are being explored in Visakhapatnam and Chandikhol.
- ADNOC is targeting an increase in its total crude oil production capacity to five million barrels a day by 2027.
Background and context
India is the world's third-largest consumer of crude oil, importing over 85% of its domestic petroleum requirements. To mitigate severe supply disruptions and geopolitical price volatility, the Government of India through ISPRL established underground Strategic Petroleum Reserves (SPR) with a combined capacity of 5.33 million metric tonnes (around 39 million barrels) across three locations: Visakhapatnam, Mangaluru, and Padur. The UAE, through state-owned ADNOC, has been a pioneering foreign partner in India's strategic storage program, having previously stored crude in the Mangaluru facility under a landmark 2018 energy pact. Expanding these reserves to include liquefied natural gas (LNG) and liquefied petroleum gas (LPG), alongside overseas storage options like Fujairah in the UAE, marks a crucial evolution in India's comprehensive national energy security architecture.
International organisations
- Abu Dhabi National Oil Company (ADNOC) — State-owned oil company of the United Arab Emirates serving as a primary supplier and strategic infrastructure partner for India's energy sector.
Mains practice: Examine the strategic significance of expanding India's Strategic Petroleum Reserves (SPR) through international partnerships in the context of persistent geopolitical volatility in West Asia.
Introduction:
India, as the world's third-largest energy consumer, imports over 85% of its crude oil requirements, making its economy vulnerable to supply chain disruptions in West Asia. Expanding Strategic Petroleum Reserves (SPR) via international collaborations, such as the ongoing discussions between ISPRL and UAE's ADNOC, is vital for insulating domestic markets from external shocks.
Body:
• Mitigation of Geopolitical Risks: With West Asian chokepoints like the Strait of Hormuz vulnerable to conflict, strategic reserves guarantee a commercial buffer. Collaborations targeting up to 30 million barrels of storage in facilities like Mangaluru, Visakhapatnam, and Chandikhol enhance national resilience.
• Public-Private and Bilateral Synergies: Partnering with national oil companies like ADNOC—which supplied over 500,000 barrels a day to India in 2025—allows shared leasing, foreign direct investment in energy infrastructure, and diversified supply agreements for critical cooking fuels like LPG and LNG.
• Comprehensive Energy Transition Support: Beyond crude oil, expanding storage infrastructure to include LNG and LPG stabilizes domestic retail prices and supports India's transition toward a gas-based economy, aligning with SDG 7 (Affordable and Clean Energy).
• Strategic Diplomacy and Economic Integration: Energy partnerships act as anchors for deeper strategic frameworks, transforming buyer-seller dynamics into long-term co-investments across refining, trading, and shipping networks.
Way Forward:
• Accelerate Phase-II SPR development at underground rock caverns in Chandikhol (Odisha) and Padur (Karnataka) through time-bound public-private partnership models.
• Diversify strategic storage locations by incorporating overseas bilateral storage facilities, such as those proposed at Fujairah in the UAE.
• Establish a unified national energy data grid to monitor stock levels and dynamic demand-supply buffers efficiently.
Conclusion:
Expanding India's strategic petroleum reserves through robust international alliances is an imperative security measure. Safeguarding uninterrupted hydrocarbon supplies ensures macroeconomic stability and underpins India's broader march toward sustainable national development.
Prelims practice questions
Q1. Consider the following statements regarding India's Strategic Petroleum Reserves: 1. Indian Strategic Petroleum Reserves Limited (ISPRL) is a special purpose vehicle under the Ministry of Petroleum and Natural Gas. 2. India's existing strategic crude oil storage facilities include locations at Visakhapatnam, Mangaluru, and Padur. 3. The strategic storage network in India is currently designed exclusively to store liquefied natural gas (LNG) rather than crude oil. How many of the above statements are correct?
- Only one
- Only two
- All three
- None
Answer: B. Statement 1 is correct: ISPRL is a wholly owned subsidiary of the Oil Industry Development Board (OIDB) under the Ministry of Petroleum and Natural Gas. Statement 2 is correct: India's Phase-I strategic crude oil reserves were established in Visakhapatnam, Mangaluru, and Padur. Statement 3 is incorrect because the strategic storage network was primarily built for crude oil, though expansions to include products like LPG and LNG are currently under exploration.
Q2. Which of the following best describes the primary mandate of Indian Strategic Petroleum Reserves Limited (ISPRL)?
- Regulating retail petroleum pricing and setting domestic fuel taxes across Indian states
- Procuring, constructing, and managing emergency crude oil storage facilities to ensure national energy security
- Issuing environmental clearance licenses for upstream offshore oil and gas drilling operations
- Managing international maritime trade routes and commercial shipping fleets in the Indian Ocean
Answer: B. ISPRL is mandated to establish and maintain emergency crude oil reserves to buffer the nation against global energy supply shocks and sudden crude shortages. Option A relates to tax authorities and oil marketing companies; Option C relates to environmental ministries and regulatory bodies; Option D relates to maritime agencies.
Q3. Consider the following statements: Statement-I: Abu Dhabi National Oil Company (ADNOC) has been exploring partnerships with ISPRL to expand strategic crude oil, LNG, and LPG storage within India. Statement-II: India imports less than 30% of its total crude oil requirements, making domestic storage expansions primarily ornamental. Which one of the following is correct in respect of the above statements?
- Both Statement-I and Statement-II are correct and Statement-II explains Statement-I
- Both Statement-I and Statement-II are correct but Statement-II does not explain Statement-I
- Statement-I is correct but Statement-II is incorrect
- Statement-I is incorrect but Statement-II is incorrect
Answer: C. Statement-I is correct as ADNOC is actively discussing extended supply and storage agreements with ISPRL. Statement-II is incorrect because India imports over 85% of its crude oil requirements, rendering strategic reserves critical for national energy security.
Revision flashcards
- What is the nodal ministry for Indian Strategic Petroleum Reserves Limited (ISPRL)? Ministry of Petroleum and Natural Gas, Government of India.
- What were the initial operational locations of India's Strategic Petroleum Reserves (Phase-I)? Visakhapatnam (Andhra Pradesh), Mangaluru (Karnataka), and Padur (Karnataka).
- What specific production target has ADNOC set for its daily oil production capacity by the year 2027? Five million barrels of crude oil a day by 2027.
- What proportion of India's total crude oil imports was supplied by ADNOC in the year 2025? More than 500,000 barrels a day, accounting for almost one in ten barrels of India's crude imports.
- Why is expanding strategic petroleum reserves crucial for developing economies like India? It cushions the domestic economy against severe international crude price volatility, supply chain choke-points, and sudden geopolitical disruptions in energy markets.