Odisha Strategic Petroleum Reserve project delayed as UAE pursues crude sales agreement

The Chandikhol Strategic Petroleum Reserve (SPR) in Odisha continues to face timeline setbacks as negotiations over crude procurement agreements with the UAE enter a critical phase. The project, approved by the Union Cabinet alongside another SPR facility nearly five years ago, has become entangled in discussions over supply terms and commercial arrangements.

The ₹8,743 crore facility represents a significant component of India's energy security infrastructure, designed to augment the nation's oil storage capacity. Strategic petroleum reserves serve as a buffer against supply disruptions and price volatility in global crude markets, making them a critical element of energy policy.

The UAE's insistence on formalizing a crude sales agreement before proceeding has introduced additional procedural requirements that have extended the project timeline beyond initial expectations. Such bilateral arrangements typically involve detailed negotiations on pricing mechanisms, delivery schedules, and force majeure clauses.

India currently operates three operational SPRs at Visakhapatnam, Mangalore, and Padur with a combined capacity of 5.33 million barrels. The expansion projects approved in 2018, including the Chandikhol facility, were intended to nearly double India's strategic reserves capacity and enhance the country's petroleum security posture.

Government officials have indicated that resolution of the bilateral agreement framework is expected to facilitate project advancement, though no revised completion timeline has been formally announced.