Can India build a strategic fuel system? | Explained

The transition to a strategic fuel system requires moving beyond simple storage capacity to robust inventory management. India currently has limited operational underground storage, primarily crude oil in Phase I of the Strategic Petroleum Reserve (SPR) at Visakhapatnam, Mangaluru, and Padur. The proposed expansion to include significant Liquefied Natural Gas (LNG) and Liquefied Petroleum Gas (LPG) storage represents a massive capital investment challenge, estimated in the billions. This highlights the concept of Energy Security, which the International Energy Agency (IEA) defines as the uninterrupted availability of energy sources at an affordable price. Developing this infrastructure is not just about digging holes; it involves integrating import terminals, pipelines, pumping systems, and commercial frameworks, potentially using Public-Private Partnerships (PPP) to manage the immense financial burden and execute complex engineering tasks.

Building strategic reserves is intrinsically tied to India's geology and geography. Underground storage often utilizes depleted oil and gas reservoirs or salt caverns. India's sedimentary basins, such as Krishna-Godavari Basin, Cambay Basin, and Rajasthan, offer potential for gas storage in depleted fields. However, this requires rigorous subsurface investigation regarding cap-rock integrity and pressure behavior. Salt caverns, investigated in Rajasthan, offer faster injection and withdrawal rates, crucial for shorter-duration balancing. Furthermore, energy security relies heavily on maritime logistics and vulnerable chokepoints like the Strait of Hormuz. Therefore, geographical diversification of import sources (e.g., Algeria, U.S.) and securing shipping capabilities are as critical as domestic storage, creating a complex, multi-nodal infrastructure network rather than isolated storage sites.

The execution of this strategic fuel programme involves multiple regulatory and administrative bodies. The Petroleum and Natural Gas Regulatory Board (PNGRB) plays a crucial role, having recently authorized extensive new LPG pipelines to improve inland connectivity. The Ministry of Petroleum and Natural Gas is proposing regulations requiring LNG import terminals to maintain excess storage capacity available to the government during crises. The ongoing challenges with Phase II of the Strategic Petroleum Reserve (SPR) at Chandikhol demonstrate the governance hurdles of land acquisition and finalizing commercial frameworks. Effective governance must coordinate these diverse elements—geological surveys, environmental clearances, pipeline authorization, and international shipping joint ventures (like the one proposed by the Shipping Corporation of India)—to create a unified, functional strategic energy reserve system.