To ensure energy security, the Government of India has decided to set up 5 million metric tones (MMT) strategic crude oil storages at three locations namely, Visakhapatnam, Mangalore and Padur (near Udupi). These strategic storages would be in addition to the existing storages of crude oil and petroleum products with the oil companies and would serve as a cushion in response to external supply disruptions. The construction of the proposed strategic storage facilities is being managed by Indian Strategic Petroleum Reserves Limited (ISPRL), a Special Purpose Vehicle, owned by Oil Industry Development Board (OIDB).

The proposed storages would be in underground rock caverns near east and west coasts so that they are readily accessible to the refining sector. Underground rock caverns are considered the safest means of storing hydrocarbons. The estimated cost of the project is around Rs.2400 crore at September 2005 prices excluding the cost of crude oil for filling the caverns. ISPRL will have ownership and control of the crude oil inventories and will coordinate the release and replenishment of Crude Oil Stock during supply disruptions through an Empowered Committee to be constituted by the Government of India.

Engineers India Limited (EIL) has been engaged as the Project Management Consultant for all three projects.

As on 31.3.2008, the authorized capital, paid up capital and subscribed capital of the company were Rs.1,000 Crore, Rs.500 Crore and Rs.94.30 crore respectively.

Underground civil works for Visakhapatnam and Mangalore project are under progress. Pre-qualification of bidders for aboveground works for Mangalore project are under examination. Tenders have been issued to pre-qualified bidders for underground works at Padur.