Deploy L2TP VPN on Oracle Cloud Infrastructure: A Fast, Secure Deployment Guide

Deploying an L2TP/IPsec VPN on Oracle Cloud Infrastructure (OCI) gives organizations a reliable way to provide remote access with predictable static IPs and strong encryption. This guide walks you through a fast, secure deployment on OCI with practical configuration examples, network considerations, and hardening tips. It is aimed at site owners, enterprise operators, and developers who want a production-ready L2TP VPN instance.

Why choose L2TP/IPsec on OCI?

L2TP over IPsec remains a common remote access protocol because it combines the tunneling features of L2TP with IPsec’s encryption. On OCI you gain the benefits of an enterprise cloud network — virtual cloud networks (VCNs), routing tables, and firewall controls — while retaining flexibility to run your own VPN stack. Use cases include remote employee access, secure management networks, and services that require a dedicated static IP.

High-level architecture

A typical deployment consists of:

• An OCI compute instance (Linux) acting as the VPN gateway.
• A VCN with at least one public subnet for the VPN instance, and optional private subnets for downstream resources.
• Route rules and security rules (OCI Network Security Groups or Security Lists) to permit IPsec/L2TP traffic.
• VPN software stack: strongSwan (IPsec) + xl2tpd (L2TP) or libreswan + xl2tpd.
• iptables/NAT and system networking settings to forward and MASQUERADE traffic.

OCI prerequisites and network setup

Before you provision the VM, set up a VCN with an internet gateway and a public subnet. Create a route table with a default route to the internet gateway. You must also configure security lists or Network Security Groups (NSGs):

• Allow ingress UDP 500 (IKEv2) and UDP 4500 (NAT-T).
• Allow ingress UDP 1701 (L2TP) if using non-encapsulated L2TP; usually L2TP is carried over IPsec and appears through NAT-T ports.
• Allow IP protocol 50 (ESP) if you implement non-NAT traversal IPsec (note: ESP is protocol 50, not a port).
• Allow TCP/UDP for administrative access (SSH TCP 22) from your management IP(s).

OCI security lists are stateful by default; if using NSGs, ensure symmetric rules or proper state handling for established connections.

Provisioning the compute instance

Select a reasonably sized shape (e.g., VM.Standard.E2.1 or larger) depending on concurrent users and throughput. Choose a Linux distribution you are comfortable with; Ubuntu LTS and CentOS/AlmaLinux are commonly used. Assign a public IP to the instance, and optionally a reserved public IP for predictability.

Install and configure IPsec/L2TP software

Use strongSwan + xl2tpd (or libreswan + xl2tpd). Example commands for Ubuntu:

sudo apt update; sudo apt install strongswan xl2tpd pptpd ppp lsof

Note: pptpd is legacy; prefer L2TP/IPsec for encryption. The following describes a strongSwan + xl2tpd approach.

strongSwan (IPsec) configuration

Edit /etc/ipsec.conf with a basic connection. Example settings include AES-GCM or AES-CBC with SHA2, and a pre-shared key (PSK) for simplicity:

conn L2TP-PSK

keyexchange=ikev1

authby=secret

type=transport

left=%any

leftid=@YOUR_PUBLIC_IP_OR_FQDN

leftprotoport=17/1701

right=%any

rightprotoport=17/%any

auto=add

Choose strong encryption suites by editing /etc/ipsec.conf to include ike=aes256-sha2_256-modp2048 and esp=aes256-sha2_256.

Set the PSK in /etc/ipsec.secrets:

YOUR_PUBLIC_IP : PSK “your_strong_pre_shared_key_here”

xl2tpd and PPP configuration

Edit /etc/xl2tpd/xl2tpd.conf:

ipsec saref = yes

ip range = 10.10.10.100-10.10.10.200

local ip = 10.10.10.1

require chap = yes

refuse pap = yes

require authentication = yes

name = l2tpd

length bit = yes

Then configure /etc/ppp/chap-secrets for user accounts:

vpnuser l2tpd vpnpassword *

And /etc/ppp/options.xl2tpd to define PPP behavior (noauth, ms-dns, MTU/MRU):

require-mschap-v2

ms-dns 8.8.8.8

ms-dns 1.1.1.1

mtu 1400

mru 1400

Kernel and iptables settings

Enable IP forwarding and configure sysctl parameters for security and performance. Add to /etc/sysctl.conf or create /etc/sysctl.d/99-vpn.conf:

net.ipv4.ip_forward=1

net.ipv4.conf.all.accept_redirects=0

net.ipv4.conf.all.send_redirects=0

net.ipv4.conf.default.rp_filter=1

After editing, run sudo sysctl -p.

Configure NAT to masquerade VPN traffic out the public NIC. Replace eth0 with your instance’s public interface name (check with ip link):

sudo iptables -t nat -A POSTROUTING -s 10.10.10.0/24 -o eth0 -j MASQUERADE

Also add forwarding rules to allow established connections:

sudo iptables -A FORWARD -s 10.10.10.0/24 -m conntrack –ctstate NEW,ESTABLISHED -j ACCEPT

sudo iptables -A FORWARD -d 10.10.10.0/24 -m conntrack –ctstate ESTABLISHED -j ACCEPT

Persist iptables rules with iptables-persistent, netfilter-persistent, or by scripting at boot.

MSS clamping and MTU considerations

L2TP over IPsec reduces the effective MTU. Set MTU/MRU in PPP options to 1400 and add MSS clamping to prevent fragmentation:

sudo iptables -t mangle -A FORWARD -p tcp –tcp-flags SYN,RST SYN -s 10.10.10.0/24 -j TCPMSS –clamp-mss-to-pmtu

Starting services and verifying connections

Restart strongSwan and xl2tpd and enable on boot:

sudo systemctl restart strongswan

sudo systemctl enable strongswan

sudo systemctl restart xl2tpd

sudo systemctl enable xl2tpd

Check logs for errors: sudo journalctl -u strongswan -f and sudo journalctl -u xl2tpd -f. On connection attempts watch for successful IKE_SA establishments and PPP authentication messages.

Troubleshooting common issues

• Failed IKE negotiation: Verify UDP 500 and UDP 4500 are allowed in OCI security lists/NSGs, and that the PSK and algorithm suites match on client and server.
• ESP blocked: If using ESP (protocol 50), ensure OCI security lists permit protocol 50. NAT-T (UDP 4500) avoids ESP directly and is often preferred.
• Authentication failures: Verify chap-secrets and PPP options (mschapv2 required). Use strong passwords and consider centralized auth (RADIUS) for scale.
• Packets not forwarded: Confirm net.ipv4.ip_forward=1 and iptables FORWARD rules are present.

Hardening and production considerations

For production use apply these best practices:

• Use strong cryptography: Prefer AES-GCM or AES-256 with SHA-2 and at least 2048-bit DH groups where applicable.
• Replace PSKs with certificates: Certificates mitigate key reuse and allow easier rotation. strongSwan supports X.509 for IKE.
• Centralized authentication: Integrate with RADIUS/LDAP if you need many accounts or single sign-on.
• Logging and monitoring: Forward logs to a centralized system and set alerts for repeated auth failures (possible brute force).
• Failover and scalability: Horizontally scaling IPsec/L2TP is non-trivial because IPsec maintains per-session state. Consider using dynamic DNS, Floating IPs, or BGP/HA with multiple gateways; alternatively, terminate VPNs to a dedicated orchestrator or appliance designed for scale.
• Regular updates: Keep OS and VPN packages updated to address CVEs.

Advanced topics

High availability

OCI does not provide native stateful VPN clustering for custom IPsec stacks. To achieve HA: deploy two instances across availability domains and use a floating public IP (OCI reserved IP) that can be moved via automation during failover, or implement keepalived with VRRP inside the VCN. For session continuity, consider state replication tools or using a managed VPN service if uninterrupted sessions are critical.

Using BGP and dynamic routing

For advanced network topologies connecting multiple VCNs or on-premises networks, combine L2TP/IPsec with dynamic routing (BGP) or set up an IPSec VPN between OCI and your datacenter using Oracle’s VPN Connect/DRG services for route exchange and failover.

Client configuration notes

Most modern OSs support L2TP/IPsec natively (Windows, macOS, Linux, iOS, Android). Configure the client with the server’s public IP, the PSK (or certificate), and the username/password from chap-secrets. On some platforms you must enable “use for VPN and exchange of IPsec keys” or install a small helper for NAT traversal. Test with a small IP block to verify DNS resolution and resource access.

Wrap-up

Deploying L2TP/IPsec on OCI is straightforward if you carefully plan VCN networking, security rules, and the VPN stack configuration. The key steps are provisioning a properly routed public subnet, opening UDP 500/4500 (and ESP if needed), configuring strongSwan and xl2tpd with secure crypto policies, enabling IP forwarding, and applying NAT and MSS clamping. For production, harden cryptography, centralize auth, and plan for HA or managed alternatives.

For a complete walkthrough and managed options tailored to businesses, visit Dedicated-IP-VPN at https://dedicated-ip-vpn.com/.