Oil and Natural Gas Corporation (ONGC) is planning to establish India’s first strategic natural gas reserve near its gas-producing assets in western India. The proposed project is designed to strengthen the country’s energy security and protect against global supply disruptions caused by geopolitical conflicts. The initiative follows the government’s earlier proposal to develop underground natural gas storage in salt caverns, which did not progress due to high capital investment requirements and significant technical challenges. Instead, ONGC is now evaluating alternative storage solutions that are more cost-effective and technically viable.
Strategic Gas Storage Gains Importance
The proposal comes at a time when geopolitical tensions in West Asia have highlighted the vulnerability of global energy supply chains. India currently imports nearly 55% of its natural gas requirements, with annual imports valued at approximately US$15 billion. Consequently, disruptions in international gas supplies can significantly impact the country’s energy security, industrial production, and fuel availability. A strategic natural gas reserve would provide an emergency buffer, enabling the country to maintain critical gas supplies during periods of geopolitical instability or supply shortages.
ONGC Evaluates Depleted Gas Fields for Storage
ONGC plans to begin with a pilot project to assess the feasibility of storing natural gas in depleted gas reservoirs. According to the company, depleted gas fields offer several advantages. Since they have previously contained natural gas, their geological formations are already capable of safely handling high-pressure gas storage. Moreover, much of the required infrastructure already exists, reducing both development time and capital expenditure. The company is currently conducting feasibility studies to identify suitable depleted reservoirs for the project.
Alternative Storage Options Under Consideration
Besides depleted gas fields, underground aquifers are also being evaluated as potential storage sites. Aquifers are deep, porous rock formations containing water. By injecting natural gas at high pressure, the water can be displaced, allowing the gas to be stored securely beneath an impermeable rock layer until it is needed. Although aquifer storage is technically feasible, industry experts generally consider depleted gas fields to be the preferred option because they require less investment and present lower geological risks.
Strategic Reserve Complements Existing Crude Oil Storage Plans
The proposed gas reserve follows ONGC’s recent announcement to develop a 1.75-million-ton strategic crude oil storage facility. India already maintains 5.2 million tons of strategic petroleum reserves to safeguard against disruptions in crude oil supplies. Establishing a strategic natural gas reserve would further diversify the country’s emergency energy infrastructure and strengthen its long-term energy resilience.
Industry Recommends a Hybrid Commercial Model
Energy industry experts believe the proposed gas storage infrastructure could also generate commercial value. Rajesh Mediratta, Managing Director and Chief Executive Officer of Indian Gas Exchange (IGX), suggested that part of the storage capacity should be allocated for commercial operations while reserving the remainder exclusively for emergencies. For example, if a storage facility has a capacity of 5 billion cubic metres (BCM), around 2 BCM could be actively traded and replenished under a commercial model, while the remaining 3 BCM would remain available for strategic use during national emergencies.
According to Mediratta, this hybrid approach has been successfully implemented in several European countries and helps create a sustainable revenue model for storage infrastructure. He also emphasized that depleted gas fields remain the most practical option because they utilize existing infrastructure and significantly reduce capital expenditure compared with underground salt caverns.
Experts Call Strategic Gas Storage a National Priority
Industry experts agree that India should accelerate the development of strategic natural gas storage facilities. Manas Majumdar, Partner and Oil and Gas Leader at PwC India, noted that countries such as the United States, China, Germany, and several European nations have already established large-scale strategic gas storage systems to enhance energy security and manage supply disruptions. He emphasized that India should adopt similar long-term infrastructure to strengthen the resilience of its natural gas sector.
LNG Import Dependence Highlights Urgency
Although India has successfully diversified its crude oil imports over recent years, the same flexibility is not available for Liquefied Natural Gas (LNG). Global LNG supplies are concentrated among a limited number of major exporters, including Qatar, the United Arab Emirates, the United States, and Angola. As geopolitical tensions continue to affect shipping routes and energy markets, India’s dependence on imported LNG has become a growing concern. One of the most critical shipping routes is the Strait of Hormuz, through which a significant portion of global LNG exports passes. Recent shipping data from S&P Global Commodities at Sea showed a sharp decline in vessel movements through the strait, underscoring the vulnerability of global gas supply chains during periods of regional conflict.
Building Long-Term Energy Resilience
As India’s natural gas consumption continues to grow across industries, power generation, fertilizers, and city gas distribution, ensuring reliable fuel availability has become increasingly important. As reported by thehindubusinessline.com, by developing strategic natural gas storage infrastructure, ONGC aims to reduce supply risks, improve emergency preparedness, and strengthen India’s long-term energy security. If successfully implemented, the project could become a critical component of the country’s evolving energy strategy while supporting greater resilience against future geopolitical and market disruptions.
