Oil and Natural Gas Corporation (ONGC) has signed a Heads of Agreement with Japan’s Mitsui OSK Lines to jointly build, own, and operate two very large ethane carriers (VLECs). These vessels will import ethane as feedstock for ONGC’s petrochemical arm, ONGC Petro Additions (OPaL).

The collaboration aims to address the upcoming shift in LNG composition from Qatar, which will supply ‘lean gas’ stripped of ethane and propane starting 2028, under a revised contract. ONGC currently imports 7.5 million tonne of LNG annually from Qatar, of which five million tonne includes ethane and propane on a firm basis.

To compensate for the loss of petrochemical feedstock in future LNG supplies, ONGC plans to begin importing ethane by mid-2028. It had earlier invested Rs 1,500 crore to set up a C2/C3 extraction plant at Dahej, Gujarat, for similar purposes. The proposed VLECs will help maintain OPaL’s production and ensure feedstock availability. The arrangement is subject to board approval, and further specifics will follow the final agreement.