OPaL’s Lifeline: ONGC’s Urgent Push for Ethane Imports Amid LNG Overhaul

Oil and Natural Gas Corporation (ONGC) is set to embark on a major strategic shift, announcing plans to begin importing ethane from mid-2028 to secure feedstock for its flagship petrochemical subsidiary, ONGC Petro additions Ltd (OPaL). This move comes in response to a revised LNG supply contract with QatarEnergy, which will see India receiving ‘lean’ LNG—stripped of ethane and propane—starting in 2028, ending a long-standing supply of ‘rich’ LNG vital for petrochemical manufacturing.

Key Highlights:

ONGC will import 800,000 tonnes of ethane annually, beginning May 2028, to ensure uninterrupted operations at OPaL’s mega grassroot petrochemical complex in Dahej, Gujarat—the largest standalone dual-feed cracker in Southeast Asia.

The company is actively seeking joint venture partners to build and operate very large ethane carriers (VLECs), with ONGC holding at least a 26% stake in the proposed ventures. These specialized vessels will transport ethane, likely sourced from the United States, to Indian shores.

ONGC has already invested ₹1,500 crore in a C2/C3 extraction plant at Dahej, but the shift to ‘lean’ LNG makes direct ethane imports essential for continued production of polymers and advanced petrochemicals.

The transition is critical to prevent potential shutdowns at the OPaL facility, which has a capacity of 1.1 million tonnes of ethylene per year and produces a range of high-demand polymers for both domestic and export markets.

The deadline for expressions of interest from potential JV partners is March 27, 2025, marking the start of a new era in ONGC’s petrochemical supply chain strategy.

Sources: Business Standard, Economic Times Manufacturing, India Infoline