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NewsMint MoneyREITS NewsWest Asia war pushes ONGC to plan India's first strategic gas reserve Rituraj Baruah5 min read23
Jul 2026, 06:00 AM ISTIndia's overall natural gas consumption is projected to reach 297-365mmscmd by 2030 and
495-630mmscmd by 2040.(Reuters)SummaryA strategic natural gas reserve can cushion the impact of crises such as the West
Asia war, which has disrupted global energy suppliesGift this articleCheck your wealthThis is a Mint Premium article
gifted to you.Subscribe to enjoy similar stories.Subscribe nowState-run Oil and Natural Gas Corp. Ltd, or ONGC, is
planning to create India's first strategic natural gas reserve near its gas-producing assets in western India, according
to two people close to the matter.The development comes after the Indian government's plan to store natural gas in
underground salt caverns failed to take off because of high capital expenditure and technical complexities.A strategic
natural gas reserve can cushion the impact of crises such as the West Asia war, which has disrupted global energy
supplies, exposing India's vulnerability as the country imports about 55% of its natural gas requirements, valued at
around $15 billion annually.Also Read | OIL, ONGC stocks get double bonanza: royalty boost, after higher realizationsThe
plan also follows the company's recent announcement to build a 1.75 million-tonne (mt) strategic crude oil storage
facility. New Delhi has strategic petroleum reserves of 5.2 mt.“The plan is to initially come up with a pilot. The
consideration right now is to do a feasibility survey and develop a reserve or storage in a depleted gas well, as that
would be ready to handle the pressure of natural gas and the geology is already meant for it,” said one of the two
persons cited above.Apart from salt caverns, aquifers are another option for natural gas storage. A deep, water-bearing,
porous rock formation can be converted into an artificial underground gas reservoir by injecting gas at high pressure to
push the water out, trapping the gas safely beneath an impermeable cap rock.Mint reported on 4 March that the Petroleum
and Natural Gas Regulatory Board (PNGRB) is considering proposing to the government to set up overground storage tanks
near the liquefied natural gas (LNG) terminals in the country.However, when such strategic reserves are planned, a
portion should also be reserved for commercial use, said Rajesh Mediratta, managing director and chief executive of
Indian Gas Exchange."Suppose the reserve is for 5 BCM (billion cubic metres). About 2 BCM can be used under a commercial
model that can be easily traded and refilled, and the rest should be kept for strategic use only in an emergency
situation. This will develop a functional revenue model as witnessed in Europe," he said.He added that the first
preference for natural gas storage should always be depleted fields, given that the required infrastructure is already
in place and capex is much lower than for salt caverns.Also Read | ONGC needs more than higher crude oil pricesMint's
queries emailed to ONGC and the Union petroleum ministry remained unanswered.Energy vulnerabilitiesAlthough the country
has diversified oil imports over the past few years, LNG imports cannot be diversified as aggressively, given the
limited large sources available globally. Currently, the US and Angola are among the key suppliers, alongside Qatar and
the United Arab Emirates, which have been impacted by the war.Ships are avoiding the Strait of Hormuz, as Iran's Islamic
Revolutionary Guard Corps (IRGC) has announced the closure of the route. According to data from S&P Global
Commodities at Sea, there were a total of 16 transits through the Strait of Hormuz on 20 July, down from the pre-war
levels of over 130 vessels.“Nearly half of the detected traffic consisted of support and miscellaneous vessels,
highlighting the limited level of commercial activity in the waterway,” said the S&P report on Wednesday.Natural
gas imports stood at $14.9 billion in FY25, according to data from the Petroleum Planning and Analysis Cell (PPAC), of
which Qatar’s share was about 50%. According to government data, natural gas accounts for about 7% of the country's
energy basket, and the government aims to take it to 15% by 2030.India's overall natural gas consumption is projected to
reach 297-365mmscmd by 2030 and 495-630mmscmd by 2040. Industrial and commercial demand is expected to grow 10-15% by
2030, showed projections by PNGRB.India currently has eight operational onshore LNG terminals, offering a combined
regasification capacity of 52.7mmtpa (million metric tonnes per annum), equivalent to 190mmscmd. Several other
land-based terminals and floating storage regasification units (FSRUs) are in various stages of development.“It is the
need of the hour for India to develop such strategic gas storages. Several countries including China, US, Germany and
Europe as a whole have set precedents in the case of such long-term storage infrastructure,” said Manas Majumdar,
partner and leader, oil and gas at PwC India.Also Read | ONGC to offload stake in petchem arm OPal, eyes global
investorsHe added that although India has operational storage in terms of terminals, tankage and pipeline line-pack,
there is a need to develop proper underground gas reserves. With far fewer import sources for natural gas than crude
oil, the country needs dedicated artificial gas reserves to strengthen energy security.Energy prices increased on
Wednesday after Yemen's Houthi militia blocked the Bab-al-Mandab Strait, which connects the Red Sea to the Indian Ocean,
a key route for energy flow from Yanbu port in Saudi Arabia.Gift this articleCheck your wealthAbout the AuthorRituraj
BaruahRituraj Baruah is a special correspondent covering energy, housing, urban affairs, heavy industries and small
businesses at Mint. He has reported on diverse sectors over the last eight years including, commodities and stocks
market, insolvency and real estate; with previous stints at Cogencis Information Services, Indo-Asian News Service
(IANS) and Inc42.Catch all the Business News , Corporate news , Breaking News Events and Latest News Updates on Live
Mint. Download The Mint News App to get Daily Market Updates.MoreTopics#ONGC#news#india#Oil#crude oil#LPG#LNG
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