Megha Engineering & Infrastructures (MEIL) has won the mandate to build and operate India’s first private-sector strategic petroleum reserve (SPR) at Padur, Karnataka.

The Rs 5,700-crore project, with an estimated Rs 11,020 crore (USD 1.25 billion) crude oil filling cost at current prices, marks the largest-ever private initiative in India's energy security landscape. MEIL has five years to construct and will operate the 2.5 million tonne (MMT) storage facility for 60 years, significantly adding to India's existing 5.33-MMT SPR capacity, which currently covers only eight to nine days of crude demand.

The state-owned Indian Strategic Petroleum Reserves (ISPRL), which manages existing reserves, conducted the bidding process, focusing on the lowest viability gap funding (VGF) request. MEIL’s bid, slightly below the Rs 3,420-crore (60% of project cost) VGF cap, outbid two competitors. ISPRL is expected to sign a deal soon, providing MEIL with a 214-acre land parcel free of cost, and may mandate partial filling of the SPR to support emergency preparedness.