Ethane Import Deal Analyzed

ONGC, a major oil and gas company, and Petronet LNG (PLL), a gas infrastructure company, have made a deal to handle ethane – a key ingredient in making plastics – for the next 15 years. This agreement will see ONGC use PLL’s facilities to store and manage ethane that’s brought into India. It’s like having a dedicated space to keep and move this important gas.

Key Points

• ONGC & PLL: 15-year agreement for ethane handling.
• PLL builds ethane storage: 170,000 cubic meters at Dahej.
• ONGC secures 600,000 tons per year of capacity.
• New jetty handles ethane, propane, and LNG.
• Project starts FY 2028-2029, expected revenue: ₹5,000 crore.
• Supports OPaL’s petrochemical complex and feedstock needs.

PLL is building a special facility in Dahej, Gujarat, that can handle ethane, propane, and liquefied natural gas (LNG). This means they’ll be able to receive gas in liquid form and then turn it back into a gas for use. The goal is to help ONGC get the ethane they need to make plastics and other products.

ONGC will reserve space in PLL’s facility to store and manage the ethane. This will ensure a steady supply for their operations. The agreement covers approximately 600,000 tons of ethane each year.

This deal is important because it supports the growth of India’s petrochemical industry. Ethane is a key ingredient in many plastics, and this arrangement helps ensure a reliable supply for companies like ONGC Petro Additions Limited (OPaL), which uses ethane to make products at its large factory in Dahej.

ONGC plans to import ethane using large ships (Very Large Ethane Carriers – VLECs) – each holding around 100,000 cubic meters – on a mix of long-term, short-term, and spot purchase agreements. This flexibility allows them to meet fluctuating demand.

PLL’s new jetty is a first of its kind in India and enables the import of ethane, propane, and LNG, offering a major boost to India’s ability to handle these resources and supporting related industries.

This ethane import agreement represents a strategic investment in India’s future petrochemical production capabilities.