ONGC to partner with Mitsui OSK Lines to build two ships to import ethane

The Very Large Ethane Carriers to be built under the deal will supply ethane feedstock exclusively to ONGC Petro Additions Ltd for its petrochemical factory at Dahej

India’s largest oil and gas exploration and production company, state-owned Oil and Natural Gas Corporation Ltd (ONGC), and Japan’s shipping company Mitsui OSK Lines Ltd agreed on Thursday to build and operate two large ships. The vessels, of the Very Large Ethane Carriers (VLECs) class, will be used by an ONGC subsidiary, ONGC Petro Additions Ltd (OPaL), to import ethane, a key chemical used in the petrochemical industry.

 

The companies have signed a Heads of Agreement, which is used to finalise major terms between the parties before the signing of the definitive contract.

 

The company said in a statement that the deal is subject to approval from the board and that further details will be shared following the signing of the partnership agreement. 

 

It said that imports from various countries will be used solely by OPaL as feedstock, meaning ethane will serve as the raw material for producing other products at the plant.

 

Earlier this year, Reuters reported that ONGC was planning to source 800,000 tonnes per year of ethane to secure feedstock for OPaL from May 2028.

 

According to a PTI report, ONGC spent about ₹1,500 crore to set up a C2 (ethane) and C3 (propane) extraction plant at Dahej in Gujarat. The extracted C2/C3 is used as feedstock in its petrochemical subsidiary, OPaL.

 

ONGC closed at ₹244, with a gain of ₹2.85, or 1.18 per cent, on the BSE on Thursday.