Oil and Natural Gas Corporation (ONGC) and Petronet LNG (PLL) have signed a 15-year term sheet for ethane unloading, storage, and handling (USH) services.

The agreement, set to commence between October and December 2028, will see PLL develop ethane storage and handling facilities at Dahej, Gujarat, with a storage capacity of approximately 1,70,000 cubic mtrs. PLL is also constructing a third jetty at Dahej to handle ethane and propane, alongside LNG.

Under the term sheet, ONGC will reserve around 600 KTPA of capacity at PLL's facilities. PLL will receive, store, and handle ethane sourced and imported by ONGC, with re-delivery at the designated delivery point. The deal is expected to generate Rs 5,000 crore in revenue over 15 years. As part of its long-term strategy to ensure a steady and reliable supply of ethane to ONGC Petro Additions (OPaL), ONGC plans to procure and import ethane through very large ethane carriers (VLECs), each with a capacity of around 100,000 CBM. The ethane will be sourced on a mix of long-term, short-term, and spot contracts.

OPaL, a subsidiary of ONGC, operates one of India’s largest petrochemical complexes at Dahej, Gujarat, which houses a world-scale ethylene cracker unit that uses ethane as its primary feedstock.