<p>New Delhi: State-owned Oil and Natural Gas Corporation (ONGC) has signed an agreement with Japan's Mitsui OSK Lines to enter into a partnership to build two very large ethane carriers that will be used to import petrochemical feedstock for its subsidiary.</p>.<p>In a regulatory filing, ONGC said it signed a Heads of Agreement on Thursday with Mitsui "to enter into a partnership to build, own and operate two very large ethane carriers (VLECs).</p>.<p>It, however, did not give financial details of the partnership, including the equity stake the two firms would hold.</p>.<p>"The VLECs shall be shipping imported ethane to ONGC Petro Additions Limited (OPaL), a subsidiary of ONGC, for captive use as feedstock," the filing said. "This arrangement is subject to Board approval and further details shall be shared after signing of the partnership agreement.</p>.<p>ONGC plans to import ethane starting in mid-2028 to compensate for the altered composition of liquefied natural gas (LNG) sourced from Qatar, according to a tender that the state-owned firm floated in March this year for selecting a partner for building the VLECs.</p>.<p>India imports 7.5 million tonnes per annum of LNG from Qatar. Under the deal, QatarEnergy supplies 5 million tonnes a year of LNG that contains methane (used to produce electricity, make fertiliser, converted into CNG or used as cooking fuel) as well as ethane and propane -- feedstock to make LPG and petrochemicals -- on a firm basis and the rest on best endeavour basis.</p>.<p>This contract is coming to an end in 2028 and the revised contract signed last year envisages QatarEnergy supplying 'lean' gas (one that is stripped of ethane and propane).</p>.<p>ONGC had spent about Rs 1,500 crore in setting up a C2 (ethane) and C3 (propane) extraction plant at Dahej in Gujarat. The C2/C3 so extracted was used as a feedstock in its petrochemical subsidiary, OPaL.</p>.<p>With the changed composition of LNG, the company is now looking at importing ethane.</p>.<p>OPaL "is having a mega grassroot petrochemical complex and having the largest standalone dual feed cracker in Southeast Asia. Plant is having a dual feed cracker i.e. a mix of Naphtha and C2 (Ethane), C3 (Propane) & C4 (Butane) as feedstock," the tender document had said. "ONGC plans to source and supply 800,000 tonnes per annum of ethane to secure the feedstock for OPaL, from May 2028 onwards.</p>.<p>And to ship this ethane, it has formed a joint venture with Mitsui to build VLECs that could ship the feedstock.</p>.<p>ONGC will be responsible for sourcing ethane. It will hire the VLECs from the joint venture for the shipping of ethane.</p>.<p>ONGC built the C2/C3 extraction unit at Dahej in Bharuch district of Gujarat in 2008-09. However, its subsidiary OPaL could build the petrochemical plant only in 2017. It sold the C2-C3 compounds extracted from the imported LNG from Qatar, to Reliance Industries-owned IPCL till its plant to convert them into polymers came up.</p>.<p>C2-C3 plant has a handling capacity of 4.9 million tonnes per annum of LNG. OPaL plant comprises 1.1 million tonnes a year of ethylene capacity dual feed cracker, along with associated units and polymer plants, to manufacture HDPE, LLDPE, PP and Styrene Butadiene Rubber. </p>
<p>New Delhi: State-owned Oil and Natural Gas Corporation (ONGC) has signed an agreement with Japan's Mitsui OSK Lines to enter into a partnership to build two very large ethane carriers that will be used to import petrochemical feedstock for its subsidiary.</p>.<p>In a regulatory filing, ONGC said it signed a Heads of Agreement on Thursday with Mitsui "to enter into a partnership to build, own and operate two very large ethane carriers (VLECs).</p>.<p>It, however, did not give financial details of the partnership, including the equity stake the two firms would hold.</p>.<p>"The VLECs shall be shipping imported ethane to ONGC Petro Additions Limited (OPaL), a subsidiary of ONGC, for captive use as feedstock," the filing said. "This arrangement is subject to Board approval and further details shall be shared after signing of the partnership agreement.</p>.<p>ONGC plans to import ethane starting in mid-2028 to compensate for the altered composition of liquefied natural gas (LNG) sourced from Qatar, according to a tender that the state-owned firm floated in March this year for selecting a partner for building the VLECs.</p>.<p>India imports 7.5 million tonnes per annum of LNG from Qatar. Under the deal, QatarEnergy supplies 5 million tonnes a year of LNG that contains methane (used to produce electricity, make fertiliser, converted into CNG or used as cooking fuel) as well as ethane and propane -- feedstock to make LPG and petrochemicals -- on a firm basis and the rest on best endeavour basis.</p>.<p>This contract is coming to an end in 2028 and the revised contract signed last year envisages QatarEnergy supplying 'lean' gas (one that is stripped of ethane and propane).</p>.<p>ONGC had spent about Rs 1,500 crore in setting up a C2 (ethane) and C3 (propane) extraction plant at Dahej in Gujarat. The C2/C3 so extracted was used as a feedstock in its petrochemical subsidiary, OPaL.</p>.<p>With the changed composition of LNG, the company is now looking at importing ethane.</p>.<p>OPaL "is having a mega grassroot petrochemical complex and having the largest standalone dual feed cracker in Southeast Asia. Plant is having a dual feed cracker i.e. a mix of Naphtha and C2 (Ethane), C3 (Propane) & C4 (Butane) as feedstock," the tender document had said. "ONGC plans to source and supply 800,000 tonnes per annum of ethane to secure the feedstock for OPaL, from May 2028 onwards.</p>.<p>And to ship this ethane, it has formed a joint venture with Mitsui to build VLECs that could ship the feedstock.</p>.<p>ONGC will be responsible for sourcing ethane. It will hire the VLECs from the joint venture for the shipping of ethane.</p>.<p>ONGC built the C2/C3 extraction unit at Dahej in Bharuch district of Gujarat in 2008-09. However, its subsidiary OPaL could build the petrochemical plant only in 2017. It sold the C2-C3 compounds extracted from the imported LNG from Qatar, to Reliance Industries-owned IPCL till its plant to convert them into polymers came up.</p>.<p>C2-C3 plant has a handling capacity of 4.9 million tonnes per annum of LNG. OPaL plant comprises 1.1 million tonnes a year of ethylene capacity dual feed cracker, along with associated units and polymer plants, to manufacture HDPE, LLDPE, PP and Styrene Butadiene Rubber. </p>