The government-owned Oil and Natural Gas Corporation (ONGC) has ventured into the specialized ethane transport sector through a strategic alliance with Japan's Mitsui OSK Lines (MOL), representing a notable extension of its petrochemical supply chain.

As part of the agreement, ONGC and MOL will establish two joint venture companies, with each company possessing one very large ethane carrier (VLEC). The partners will each possess a 50percent stake in both projects, with the total funding for the two ships estimated to be approximately $370 million. The vessels are set to commence operations by mid-2028, delivering ethane from the United States to ONGC Petro Additions Ltd (OPaL), the petrochemical arm of ONGC.

The joint ventures—Bharat Ethane One IFSC and Bharat Ethane Two IFSC—will be based in Gujarat’s GIFT City. ONGC plans to invest by purchasing 200,000 equity shares of Rs.100 each in both companies, whereas MOL will handle the operation of the Indian-flagged ships.

ONGC's involvement in ethane transportation is motivated by the requirement to ensure stable feedstock supplies for OPaL. The company anticipates diminished access to ethane-rich gas from Qatar in the near future, as supplies are expected to transition to lean gas that contains less ethane and propane. To close this gap, ONGC aims to bring in about 800,000 tonnes of ethane each year beginning in 2028.

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MOL offers considerable expertise to the collaboration, which includes managing LNG carriers for Petronet LNG and ethane carriers for Reliance Industries. The two VLECs will be built at shipyards in South Korea, showcasing the technical intricacies of ethane transport.

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OPaL runs the largest dual-feed cracker in India, able to handle both naphtha and gaseous feedstocks like ethane, propane, and butane. As a component of its comprehensive integration plan, ONGC has earlier invested approximately Rs.1,500 crore in a gas extraction plant at Dahej, which has a processing capability of 4.9 million tonnes of LNG annually.

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The partnership aims to strengthen ONGC’s downstream integration by merging MOL’s worldwide shipping knowledge with ONGC’s feedstock procurement and petrochemical activities, guaranteeing consistent and dependable ethane supplies in the long run.