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ONGC, Japan's MOL Launch Ethane Shipping JV to Boost India's Energy Logistics

ONGC has entered a 50:50 joint venture with Japan's Mitsui O.S.K. Lines to form two companies that will each own and operate a Very Large Ethane Carrier. These Indian-flagged vessels will transport ethane from the United States to meet the feedstock needs of ONGC's subsidiary, OPaL. The partnership leverages MOL's shipping expertise and ONGC's regional strength to create value in the energy transportation chain. The initiative, supported by relevant ministries, aligns with national goals for maritime infrastructure and self-reliance.

Key Points: ONGC & Mitsui O.S.K. Lines Form Ethane Shipping Joint Venture

  • 50:50 JV with Japan's Mitsui O.S.K. Lines
  • Two new VLEC vessels under Indian flag
  • Ethane transport from US to ONGC subsidiary OPaL
  • Aligns with Maritime Amrit Kaal Vision 2047
2 min read

ONGC forays into ethane shipping via JV with Japan's Mitsui O.S.K. Lines

ONGC partners with Japan's Mitsui O.S.K. Lines in a 50:50 JV to own and operate Very Large Ethane Carriers for US-to-India feedstock transport.

"The venture is closely aligned with the Prime Minister's Maritime Amrit Kaal Vision 2047 - ONGC statement"

New Delhi, Jan 5

Upstream public sector giant Oil and Natural Gas Corporation Limited on Monday signed joint venture agreements with Japan's Mitsui O.S.K. Lines Ltd. for a 50 per cent stake each in two joint venture entities -- Bharat Ethane One IFSC Private Limited and Bharat Ethane Two IFSC Private Limited, registered in Gift City at Gujarat's Gandhinagar.

"The Maharatna company will subscribe to 2,00,000 equity shares, of Rs 100 per share, in each of the joint venture companies. Upon completion of the equity subscription, the ONGC will hold a 50 per cent equity stake in each of the joint venture entities, with the remaining 50 per cent held by M/s Mitsui O.S.K. Lines Ltd., Japan," the company said in a statement.

Each joint venture company will own and operate one Very Large Ethane Carrier (VLEC). The VLECs will operate under the Indian flag and will be deployed for the transportation of ethane from the US to meet the feedstock requirements of the ONGC Petroadditions Limited (OPaL), a subsidiary of the ONGC.

This strategic collaboration constitutes a significant milestone in strengthening long-term cooperation between the ONGC and the MOL. By leveraging the MOL's global maritime expertise alongside the ONGC's strong regional presence and operational capabilities, the partnership is expected to create substantial value across the energy transportation and value chain.

The initiative also marks the ONGC's strategic entry into business diversification and growth. Through the deployment of VLECs for ethane transportation, the 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 venture is closely aligned with the Prime Minister's Maritime Amrit Kaal Vision 2047, which emphasises national self-reliance, development of world-class maritime infrastructure, and long-term economic resilience. The initiative has been undertaken with the guidance and support of the Ministry of Petroleum and Natural Gas and the Department of Investment and Public Asset Management (DIPAM), Ministry of Finance," the ONGC statement said.

- IANS

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Reader Comments

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Priya S
Good to see a PSU taking strategic steps. However, I have a question - why are we importing ethane from the US? Shouldn't we be focusing on developing our own domestic feedstock sources and reducing import dependence in the long run? The partnership is good, but the dependency isn't.
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Vikram M
Registering the JVs in GIFT City, Gujarat is a masterstroke! It shows our financial hubs can attract global partnerships. "Make in India" for shipping too - VLECs under the Indian flag! 🚢 This is a solid step towards becoming a maritime and energy logistics powerhouse.
S
Sarah B
As someone in the logistics sector, this is huge. Very Large Ethane Carriers are highly specialised ships. Partnering with MOL, which has over a century of experience, will give ONGC a massive learning curve. This can spawn a whole new skilled maritime industry segment in India.
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Rohit P
Aligning with Maritime Amrit Kaal Vision 2047 is the key takeaway. It's not just a business deal; it's about building national capability. Hope the profits from this venture are reinvested into R&D for cleaner fuels and sustainable shipping technologies. Jai Hind!
K
Karthik V
While the strategic intent is good, execution will be everything. PSUs sometimes move slowly. I hope this JV is given operational autonomy to compete globally. The real test will be how efficiently these VLECs run and if they can lower costs for OPaL.

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