After an administrative delay of more than seven years, the Odisha government has finally handed over land for the underground strategic crude oil storage project at Chandikhol in Jajpur district.
Official sources said the Jajpur district administration has executed the lease deed for around 400 acres of land in the Dankari hill region earmarked for the strategic petroleum reserve (SPR) being set up by Indian Strategic Petroleum Reserves Limited (ISPRL) at an estimated cost of ₹8,743 crore.
Sanctioned in December 2018, the proposed 4 million tonne (mt) underground rock cavern crude oil storage facility faced delays due to issues with land handover and illegal stone quarrying in the hill region that threatened its sustainability.
After remaining under the carpet for over six years, the proposed project received approval from the state’s High-Level Clearance Authority (HLCA) in January last year, followed by MoUs with Industrial Promotion and Investment Corporation Ltd (Ipicol) and the state government. However, land continued to be a hurdle for the crucial project until the West Asia conflict triggered energy security concerns.
In a detailed report titled “7 years on, ₹8,700 crore Odisha strategic oil reserve project awaits land”, published on March 10, Business Standard had highlighted the issues faced by ISPRL, the wholly owned subsidiary of the Oil Industry Development Board, which functions under the Ministry of Petroleum and Natural Gas, in getting possession of the land parcel identified since early 2019.
The significance of the proposed oil reserve was felt during the crisis arising from the US-Iran conflict, and the ministry reviewed such critical proposed projects, asking states concerned to take steps to resolve the issues. Union Education Minister Dharmendra Pradhan had also urged Union Petroleum Minister Hardeep Singh Puri and Odisha Chief Minister Mohan Charan Majhi to expedite the project’s implementation.
Official sources said Chief Minister Mohan Charan Majhi personally reviewed the progress of the project to ensure that each milestone moved ahead without delay. At least 13 illegal quarries were closed following his direction, enabling the site to be secured for the project.
“Last month, Chief Secretary Anu Garg and other senior government officials had assured the ISPRL officials that the land would be handed over soon. The construction activities will commence after the bidding process is over,” sources told Business Standard.
The Chandikhol SPR has been envisioned as the world’s largest underground crude oil storage facility. It is being set up along with a similar facility of 2.5 mt at Padur in Karnataka. The current storage capacity for crude oil and petroleum products is 74 days, which includes storage of the oil marketing companies of 64.5 days and SPRs of around 9.5 days. Once operational, the upcoming SPRs will add crude oil storage capacity for 11 more days.
The Chandikhol project also includes critical infrastructure components such as an onshore pipeline linking the facility to Paradip and a proposed offshore oil terminal via a Single Point Mooring (SPM) system to facilitate crude transshipment.
Once operational, the reserve will be integrated with the pipeline network of Indian Oil Corporation, connecting key refineries at Haldia, Paradip, and Barauni. This integration is expected to enhance logistical efficiency and ensure quicker mobilisation of crude during supply disruptions.