Bhubaneswar: The proposed strategic oil reserve facility at Chandikhol in Odisha was among the key agreements signed during Prime Minister Narendra Modi’s visit to the UAE on Friday, signaling a renewed push to strengthen India’s energy security. An agreement was signed between Indian Strategic Petroleum Reserves Ltd (ISPRL) and Abu Dhabi National Oil Company (ADNOC) for collaboration on strategic reserves, officials confirmed on Saturday.
Scope of the Agreement
The Memorandum of Understanding (MoU) provides for the potential storage of up to 30 million barrels of ADNOC crude in India’s strategic petroleum reserves. This includes participation in existing facilities at Visakhapatnam and the development of new reserves at Chandikhol. Additionally, the agreement envisages possible storage arrangements in Fujairah, UAE, and collaboration in LNG and LPG infrastructure.
Chandikhol Project Details
The Chandikhol project, located in Jajpur district, was approved by the Union Cabinet in 2018 at an estimated cost of Rs 8,743 crore. It aims to create an underground crude storage capacity of 4 million metric tonnes. The project has faced delays due to land acquisition and coordination issues, but it has gained renewed urgency amid geopolitical tensions in West Asia and concerns over supply disruptions.
Once operational, the facility is expected to add more than seven days to India’s crude storage capacity, significantly enhancing the country’s ability to manage supply shocks. It is also likely to generate over 5,000 direct and indirect jobs and spur local economic activity.
Recent Developments
On April 8, 2025, ISPRL signed an MoU with the Odisha government and the state-run Industrial Promotion and Investment Corporation of Odisha to revive the project. The state has already allotted around 400 acres in the Dankari hill region, and a global tender for construction is expected to be floated soon.
First mooted in 2014, the central government announced the Chandikhol project in 2017 as part of Phase 2 expansion of the Strategic Petroleum Reserves (SPR) programme. Chandikhol enjoys a strategic locational advantage, situated about 70 to 75 km from Paradip port and the IOCL Paradip refinery, ensuring seamless crude transportation and logistics.
