50% stake: ONGC forms joint venture with Japan’s Mitsui; enters specialised ethane shipping

ONGC will take a 50 per cent stake in two joint ventures with Japan’s Mitsui OSK Lines (MOL) to enter specialised ethane shipping.

The joint ventures will each own a very large ethane carrier (VLEC), with ONGC and MOL holding equal equity. The vessels, with a combined cost of about $370 million, will transport ethane from the US to ONGC’s petrochemical arm, ONGC Petro Additions Ltd (OPaL), starting mid-2028, as reported by PTI.

The entities, Bharat Ethane One IFSC and Bharat Ethane Two IFSC, will be based in Gujarat’s GIFT City. ONGC will subscribe to 2,00,000 equity shares of Rs 100 each in both companies, while MOL will operate the Indian-flagged vessels.

The move will help ONGC secure ethane supplies as Qatar is expected to shift to supplying ‘lean’ gas that lacks ethane and propane. From 2028, ONGC plans to import around 800,000 tonnes of ethane annually to meet OPaL’s feedstock needs.

MOL brings significant shipping experience, currently operating LNG vessels for Petronet LNG and ethane carriers for Reliance Industries. The new ships will be built at South Korean shipyards.

OPaL operates India’s largest dual-feed cracker, using both naphtha and gaseous feedstocks such as ethane, propane and butane. ONGC had earlier invested Rs1,500 crore in a gas extraction plant at Dahej with a processing capacity of 4.9 million tonnes of LNG per year.

The venture is expected to strengthen ONGC’s petrochemical supply chain by combining MOL’s shipping expertise with ONGC’s sourcing capabilities.