Oil and Natural Gas Corporation (ONGC) has entered into a strategic partnership with Japanese shipping giant Mitsui OSK Lines to build and operate two very large ethane carriers (VLECs). These vessels will import petrochemical feedstock for ONGC’s subsidiary, ONGC Petro Additions Ltd (OPaL), which operates a major petrochemical complex at Dahej, Gujarat, according to sources.
$370 Million Investment for Two Vessels
ONGC and Mitsui will build, own, and operate the specialized carriers, with the two ships estimated to cost around $370 million. The construction will take place at Korean shipyards, and the vessels are expected to be ready within two-and-a-half years, enabling ethane imports from mid-2028. Mitsui is likely to hold a majority stake in the joint venture, though the equity structure will depend on ONGC’s investment appetite. The ONGC board will take a final decision on the partnership soon.
Securing Feedstock for OPaL’s Mega Petrochemical Plant
The ethane imports will secure feedstock for OPaL’s Dahej facility, which hosts Southeast Asia’s largest standalone dual-feed cracker. ONGC had earlier established a C2 (ethane) and C3 (propane) extraction unit at Dahej in 2008-09 at a cost of ₹1,500 crore, while OPaL’s petrochemical complex began operations in 2017.
Bridging the Gap After Qatar LNG Deal Revision
The move aligns with ONGC’s plan to adapt to changes in its long-term LNG contract with Qatar. India currently imports 7.5 million tonnes per annum of LNG from Qatar, of which 5 million tonnes include methane, ethane, and propane. However, the revised agreement effective 2028 will supply only lean gas stripped of ethane and propane. To bridge this gap, ONGC aims to source and supply 800,000 tonnes of ethane annually to OPaL starting May 2028. ONGC will manage sourcing, while the joint venture with Mitsui will own the carriers and lease them to ONGC for transportation.
Mitsui’s Strong Presence in India’s Shipping Sector
As reported by msn.com, Mitsui already has an established footprint in India, operating LNG and ethane carriers for major firms. These include four LNG vessels for Petronet LNG Ltd and six ethane carriers for Reliance Industries Ltd. The new collaboration with ONGC further strengthens its role in India’s energy transportation sector.
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