ONGC Partners with Mitsui to Develop Ethane Carriers for OPaL Petrochemical Supply

New Delhi, July 3, 2025 — On July 3, 2025, Oil and Natural Gas Corporation Ltd (NSE: ONGC | BSE: 500312) signed a Heads of Agreement with Mitsui O.S.K. Lines Ltd (MOL) to build, own, and operate two Very Large Ethane Carriers (VLECs) together. This is a strategic move to get feedstock for its Dahej petrochemical plant.

The ships should be able to bring in 800,000 tonnes of ethane every year starting in May 2028. This would make sure that ONGC Petro Additions Ltd (OPaL) always has the raw materials it needs. The arrangement says that ONGC will own at least 26% of the joint venture, with the option to increase that to 50%. MOL will own the rest. The overall cost of the two ships is likely to be US$370 million. The money will come from a mix of international and domestic debt, as well as government support.

This arrangement not only helps ONGC’s downstream integration, but it also fits with its bigger plan to get feedstock that isn’t affected by changes in LNG composition after its long-term contract with Qatar ends in 2028 and it switches to ethane-free “lean” LNG. Because China is not allowed to build these ships right now and the deadline is tight before May 2028, it is likely that prominent Asian shipyards, like Samsung or HD Hyundai in South Korea, will build them.

Strategic Outlook

The partnership aligns with ONGC’s broader strategy to ensure uninterrupted feedstock supply to OPaL, which operates one of India’s largest petrochemical facilities. Ethane is a key input in ethylene production, which feeds into various plastic and polymer manufacturing processes.

This initiative also marks a deeper Indo-Japanese collaboration in the energy logistics sector, supporting India’s Make in India and energy transition goals through robust infrastructure creation.

About ONGC

Oil and Natural Gas Corporation Ltd (ONGC) is India’s largest oil and gas exploration and production company, listed on both NSE and BSE. Through its subsidiary OPaL, it has a strong presence in the petrochemical segment. ONGC is a government-owned entity under the Ministry of Petroleum and Natural Gas.

Further updates regarding timelines, capacity specifications, and financial structuring of the ethane carriers will be disclosed after Board-level ratification.

REF: https://nsearchives.nseindia.com/corporate/ONGC_03072025162543_agreementsigning03072025Sd.pdf

Disclaimer:  At HDFC SKY, we take utmost care and due diligence in curating and presenting news and market-related content. However, inadvertent errors or omissions may occasionally occur.

If you have any concerns, questions, or wish to point out any discrepancies in our content, please feel free to write to us at content@hdfcsec.com.

Please note that the information shared is intended solely for informational purposes and does not make any investment recommendations