Japan’s Mitsui to run ONGC’s ethane carriers
New Delhi: Japanese shipping giant Mitsui O.S.K. Lines (MOL) will operate two very large ethane carriers (VLECs) for state-owned Oil and Natural Gas Corporation (ONGC), which is planning to import petrochemical feedstock for its subsidiary ONGC Petro Additions Ltd (OPaL), according to sources.
ONGC has partnered with Mitsui to build, own and operate the two VLECs, with discussions ongoing on the equity structure of the proposed joint venture. Two people with direct knowledge of the matter said Mitsui is likely to hold a majority stake in the vessels, which are expected to be constructed in South Korean shipyards. The final equity share will depend on ONGC’s investment appetite.
The specialised vessels, estimated to cost $370 million for the pair, will ensure steady ethane supplies for OPaL’s Dahej facility in Gujarat. Ethane imports are expected to commence around mid-2028, aligning with the timeline for construction, as VLECs typically take two-and-a-half years to build.
Mitsui already operates four liquefied natural gas (LNG) ships for Petronet LNG Ltd, India’s largest LNG importer, and six ethane carriers for Reliance Industries Ltd. The proposed arrangement with ONGC is expected to follow a similar model, though the final decision will rest with the ONGC board.
ONGC plans to start importing ethane from mid-2028 to offset changes in the composition of LNG imported from Qatar. India currently imports 7.5 million tonnes per annum (mtpa) of LNG from Qatar. Under the present long-term deal, QatarEnergy supplies 5 mtpa of “rich” gas, containing methane, ethane, and propane, on a firm basis, with the balance on a best-effort basis. However, this contract expires in 2028, and the new agreement signed last year stipulates supplies of “lean” gas, stripped of ethane and propane.
To process ethane and propane, ONGC had earlier invested around Rs 1,500 crore in a C2 (ethane) and C3 (propane) extraction plant at Dahej. The extracted feedstock was initially sold to Reliance’s IPCL until OPaL’s petrochemical plant became operational in 2017.
OPaL now runs Southeast Asia’s largest standalone dual-feed cracker, capable of processing a mix of naphtha, ethane, propane, and butane. It has a 1.1 mtpa ethylene capacity and associated polymer units producing HDPE, LLDPE, PP, and Styrene Butadiene Rubber.
According to ONGC’s tender documents, the company plans to source and supply 800,000 tonnes of ethane annually for OPaL from May 2028. To enable this, it has tied up with Mitsui for building the VLECs, which will be hired from the joint venture to transport the feedstock.
ONGC will remain responsible for sourcing the ethane, while Mitsui will oversee vessel operations.
