India to Build Strategic Gas Reserves Amid Energy Supply Vulnerabilities
India is planning to expand its strategic petroleum reserves beyond crude oil by building storage facilities for liquefied petroleum gas (LPG) and liquefied natural gas (LNG). The total cost of this project is estimated at $42 billion, according to Reuters. This expansion will take about 10 years to complete and will cover around two months of LNG demand and six weeks of LPG use when full.
The new stockpiles are expected to reduce India's reliance on imported energy sources, which currently account for half of its LNG requirements and 60% of its LPG needs. Most of these imports come from the Middle East. The government is considering additional levies for LNG and LPG consumers to finance the construction of the gas reserves.
India's current core strategic reserves can only hold enough oil for about 5-10 days of consumption, making it one of the lowest in the world compared to other major economies like China, Japan, and the US. The Indian government is expected to continue funding the buildup of its strategic crude reserves, but Prime Minister Narendra Modi has yet to approve the plan to impose additional levies on LNG and LPG consumers.