Bhubaneswar: The proposed strategic oil reserve facility at Chandikhol in Odisha figured among key agreements signed during Prime Minister Narendra Modi’s UAE visit on Friday, signalling a 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 said on Saturday.The MoU provides for potential storage of up to 30 million barrels of ADNOC crude in India’s strategic petroleum reserves, including participation in existing facilities at Visakhapatnam, and development of new reserves at Chandikhol. It envisages possible storage arrangements in Fujairah, UAE, and collaboration in LNG and LPG infrastructure.Chandikhol project in Jajpur district, approved by the Union Cabinet in 2018 at an estimated Rs 8,743 crore, aims to create an underground crude storage capacity of 4 million metric tonnes.The project has been delayed due to land acquisition and coordination issues, but 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, enhancing its ability to manage supply shocks. It is also likely to generate over 5,000 direct and indirect jobs and spur local economic activity.On April 8, 2025, ISPRL signed an MoU with the Odisha govt and 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.Mooted in 2014, the Centre announced the Chandikhol project in 2017 as part of Phase 2 expansion of the 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.
