India’s state-owned Oil and Natural Gas Corporation has signed an agreement with Japan’s Mitsui O.S.K. Lines to build and operate two very large ethane carriers to support its growing petrochemicals business.
The deal, announced by the companies on July 3, will enable ONGC to import ethane to supply ONGC Petro additions Ltd (OPaL), its petrochemical subsidiary, which operates a dual-feed cracker facility. The ships will be used to transport ethane sourced from international markets to OPaL’s plant, which relies on stable and cost-effective feedstock to produce polymers and other downstream products.
ONGC plans to begin importing around 800,000 tonnes of ethane annually from May 2028. The ethane will provide a secure supply chain for OPaL as it seeks to reduce reliance on naphtha and diversify its feedstock base.
The agreement with Mitsui O.S.K. Lines, Japan’s second-largest shipping company, is part of ONGC’s long-term strategy to integrate its upstream and downstream operations more closely. The vessels are expected to be custom-built to accommodate the specific requirements for ethane transport over long distances.
The partnership is still subject to approval by ONGC’s board of directors, the company said in a statement to Indian stock exchanges.
The move comes as Indian energy firms increase their focus on petrochemicals and gas-based feedstock in anticipation of rising demand for polymers in the domestic manufacturing, automotive, packaging and construction sectors. Ethane, which can be cracked into ethylene, is a key building block in this value chain.
If finalised, the VLEC agreement would mark ONGC’s entry into long-haul ethane logistics and represent another example of India-Japan cooperation in energy infrastructure, particularly as Asian economies look to secure diversified supply chains amid global volatility.