ONGC and Mitsui OSK: Navigating a New Era of Ethane Supply

Oil and Natural Gas Corporation (ONGC) has signed a Heads of Agreement with Japan’s Mitsui OSK Lines to jointly build, own, and operate two Very Large Ethane Carriers (VLECs). These vessels will transport ethane to serve as feedstock for ONGC Petro Additions Ltd. (OPaL), the company’s petrochemical subsidiary.

The move comes in anticipation of changes to ONGC’s LNG supply from Qatar, which will begin delivering ‘lean gas’—LNG stripped of ethane and propane—starting in 2028 under a revised long-term contract. Currently, ONGC imports 7.5 million tonnes of LNG annually from Qatar, of which 5 million tonnes include these vital petrochemical components.

To ensure continued feedstock availability, ONGC plans to start ethane imports by mid-2028. This builds on its previous ₹1,500 crore investment in a C2/C3 extraction plant at Dahej, Gujarat. The VLEC project will support uninterrupted operations at OPaL and is subject to final board approval.

News by Rahul Yelligetti.