New Delhi,04/07/2025: The Oil and Natural Gas Corporation (ONGC), a government-owned company in India, has taken a big step to secure raw materials for its petrochemical business. It has signed an agreement with Japan’s shipping company Mitsui OSK Lines to build two very large ethane carriers (VLECs). These special ships will help bring ethane gas from abroad to India.
This partnership will help ONGC import ethane for its subsidiary, ONGC Petro Additions Limited (OPaL). OPaL runs a large petrochemical plant in Gujarat, which uses ethane and other gases as raw materials to produce plastics and chemicals. The ethane brought in through these ships will be used only by OPaL.
In an official announcement, ONGC said that it signed a “Heads of Agreement” with Mitsui. This is an early step before signing a final partnership deal. ONGC has not yet revealed how much money will be invested or what percentage each company will own in the project. The final decision still needs to be approved by ONGC’s board.
ONGC is planning to import ethane starting in mid-2028. This is because the natural gas it imports from Qatar is going to change. Currently, India buys 7.5 million tonnes of liquefied natural gas (LNG) every year from Qatar. Out of this, 5 million tonnes are guaranteed under a contract. This LNG contains methane, ethane, and propane.
However, that contract is set to end in 2028. A new deal has been signed, but under the revised contract, Qatar will supply only ‘lean’ gas — which means the LNG will not contain ethane and propane. These two components are very important for making petrochemicals like plastics and rubber.
To deal with this change, ONGC is now planning to import ethane separately and has decided to build VLECs for this purpose. In March this year, ONGC had invited partners to help build these large ethane ships.
Back in 2008-09, ONGC had already built a plant in Dahej, Gujarat, to extract ethane (C2) and propane (C3) from imported LNG. But OPaL’s petrochemical plant was completed only in 2017. Until then, ONGC sold the extracted gases to Reliance Industries’ IPCL.
Now, OPaL has a huge petrochemical complex with Southeast Asia’s largest standalone dual-feed cracker. This plant can use a mix of naphtha, ethane, propane, and butane to produce ethylene. It also has other units to make different types of plastic and rubber like HDPE, LLDPE, polypropylene (PP), and styrene-butadiene rubber.
The ethane to be imported from 2028 onwards — around 800,000 tonnes every year — will be shipped using the VLECs that ONGC and Mitsui will build together. ONGC will take care of sourcing the ethane, and the joint venture will handle shipping.
This partnership is a strategic move by ONGC to secure a steady supply of petrochemical raw materials for the future, ensuring smooth operations at its OPaL plant even after changes in LNG supply from Qatar.
