New Delhi, July 3, 2025 – ONGC has signed a Heads of Agreement (HoA) with Japan’s Mitsui O.S.K. Lines (MOL) to build, own, and operate two Very Large Ethane Carriers (VLECs). This marks a strategic step in securing petrochemical feedstock and enhancing India’s downstream energy capacity.
VLECs to Secure Ethane Supply for OPaL
Under this MoU, ONGC will ship imported ethane via the new VLECs to ONGC Petro Additions Ltd (OPaL), a fully owned ONGC subsidiary. Starting in May 2028, ONGC will source 800,000 tonnes per annum of ethane to feed OPaL’s dual-feed cracker—a critical move to ensure production continuity. An ONGC source noted that VLECs carrying gas from Qatar will end in May 2028, making the new vessels essential to maintain feedstock supply.
Strategic Joint Venture with Up to 50% Stake
ONGC will maintain a minimum 26% stake in the planned joint venture, with the option to increase up to 50%. The remaining equity will belong to MOL. The JV aims to finalize shipyard agreements and secure funding and incentives—including grants—for the vessels, each with capacities near 98,000 m³, costing approximately $185–$185 million per vessel.
Also Read: ONGC Enhances Public Infrastructure in Jammu & Kashmir to Support Amarnath Yatra & Local Communities
MOL Strengthens India Ties
MOL, the world’s second-largest shipping company with nearly 800 vessels (including 97 LNG carriers), was selected via an Expression of Interest involving over 30 global shipowners. This deal gives MOL a fourth-largest fleet presence in India and adds to its regional strategic growth under its “Blue Action 2035” plan.
Timeline & Contingencies
VLECs must be delivered by May 2028 to prevent interruptions in OPaL’s crack/re operations. ONGC is exploring construction in India, Korea, or Japan—ships built domestically would qualify for government shipbuilding incentives.
About ONGC
Oil and Natural Gas Corporation Ltd, a Maharatna PSU under the Ministry of Petroleum & Natural Gas, is India’s largest hydrocarbon producer. Headquartered in New Delhi, ONGC operates across exploration, production, refining, and petrochemicals, employing over 25,000 staff.
Also Read: MRPL Strengthens Leadership Team with Appointment of 3 Executive Directors
