ONGC, Japan's Mitsui to set up 50:50 JVs in Gift City for ethane transport

Oil and gas major Oil and Natural Gas Corporation Ltd (ONGC) on Monday, January 5, said it has signed joint venture agreements and capital contribution agreements with Japan's Mitsui OSK Lines Ltd (MOL) to set up two joint venture entities in Gift City, Gandhinagar.

The two companies, Bharat Ethane One IFSC Private Ltd and Bharat Ethane Two IFSC Private Ltd, will each receive an equity subscription of 2,00,000 shares from ONGC at ₹100 per share. Upon completion, ONGC will hold a 50% stake in both

ventures, with the remaining 50% held by MOL.

Each joint venture entity will own and operate a very large ethane carrier (VLEC) under the Indian flag. The VLECs are intended to transport ethane from the United States to supply feedstock for ONGC Petro Additions Limited (OPaL), a subsidiary of ONGC.

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The initiative also marks ONGC's strategic entry into business diversification and growth. Through the deployment of VLECs for ethane transportation, ONGC aims to capitalise on emerging opportunities in energy logistics, strengthen integration across its value chain, and establish a robust operational presence in specialised shipping.

The specialised ships, to be built in Korean shipyards at an estimated cost of $370 million for the pair, are intended to secure the petrochemical feedstock for ONGC Petro additions Ltd's (OPaL) Dahej facility, with ethane imports beginning around mid-2028.

Mitsui and its partners currently own and operate four liquefied natural gas (LNG) ships for Petronet LNG Ltd, India's biggest LNG importer, and six ethane carriers for Reliance Industries Ltd.

ONGC plans to import ethane starting in mid-2028 to compensate for the altered composition of 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.

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Shares of Oil and Natural Gas Corporation Ltd ended at ₹238.05, down by ₹3.41, or 1.41%, on the BSE today, January 5.