Oil and Natural Gas Corporation (ONGC) and Petronet LNG Limited (PLL) have taken a major step toward strengthening India’s petrochemical and energy infrastructure by signing a fifteen-year Ethane Unloading, Storage and Handling (USH) Services Binding Term Sheet. The agreement will commence between October and December 2028 and continue for fifteen years from the start date.
PLL to Build One of India’s Most Advanced Ethane Facilities
Under the agreement, PLL is developing one of India’s most advanced ethane handling facilities at Dahej, Gujarat. The project includes:
*An ethane storage tank of nearly 1,70,000 cubic metres
*A specialised third jetty equipped to handle ethane, propane and LNG
This will be India’s first integrated jetty capable of receiving multiple feedstocks, strengthening its role as a strategic import hub. The new infrastructure is expected to attract third-party imports, expanding opportunities for India’s downstream petrochemical industry.
ONGC Reserves 600 KTPA Capacity at Dahej
As part of the term sheet, ONGC will reserve around 600 KTPA of capacity in PLL’s upcoming ethane storage and handling system. PLL will take full responsibility for:
*Receiving ethane imported by ONGC or its subsidiaries
*Storing and handling the cargo
*Re-delivering it at the designated delivery point
The agreement will serve as the basis for future definitive contracts between the two companies.
Revenue Opportunity
PLL expects to generate approximately ₹5,000 crore in gross revenue during the 15-year term of the contract, beginning in FY 2028–29. The project aligns with PLL’s strategy to expand beyond LNG by adding ethane and propane handling capabilities, thereby creating world-class import infrastructure for India’s growing petrochemical sector.
Ensuring Feedstock Security
For ONGC, the agreement is a critical step in securing a steady and reliable supply of ethane for ONGC Petro Additions Limited (OPaL), which operates one of India’s largest petrochemical complexes at Dahej. As reported by businessupturn.com, ONGC plans to import ethane through Very Large Ethane Carriers (VLECs) of around 100,000 CBM capacity. The imports will be arranged under long-term, short-term, and spot contracts, ensuring steady feedstock for OPaL’s world-scale ethylene cracker unit.
