ONGC to Import Ethane from 2028 as Qatar Alters LNG Supply

24 Mar 2025 , 04:22 PM

Oil and Natural Gas Corporation (ONGC) will import ethane from mid 2028 to offset the changing composition of liquefied natural gas (LNG) imported from Qatar. Under an existing supply agreement, India imports 7.5 million tonnes per annum (MTPA) of LNG from QatarEnergy.

Under this contract, 5 MTPA of LNG is being supplied on a firm basis, which contains:

• Methane (for generation of electricity, production of fertilizer, CNG conversion, and cooking fuel).
• Ethane and propane (feedstock for LPG and petrochemical production).

The existing contract runs until 2028 but under a new agreement signed last year, QatarEnergy will provide ‘lean’ gas, which means the ethane and propane will have been removed from the LNG.

ONGC spent ₹1,500 crore on a C2 (ethane) and C3 (propane) extraction facility at Dahej, Gujarat that provided feedstock for its petchem’s subsidiary ONGC Petro additions Ltd (OPaL). In 2023 and beyond, ONGC will be replacing ethane and propane seaborne imports with an increase in domestic supply, enabling ONGC to profile ethane for OPaL production, which is looking at sourcing and supplying 800,000 TPA of ethane beginning May 2028 as feedstock data for OPaL.

OPaL runs the largest standalone dual-feed cracker in Southeast Asia that can process:

• Naphtha
• C2 (Ethane)
• C3 (Propane)
• C4 (Butane)

ONGC is seeking to develop Very Large Ethane Carriers (VLECs) as joint venture (JV) partners to move ethane. ONGC is seeking companies with experience in the ownership, operation, and management of the following through an EOI:

• VLECs (Very Large Ethane Carriers)

• VLGCs (Very Large Gas Carriers)

• LNGCs (Liquefied Natural Gas Carriers)

Ethane sourcing will be carried out by ONGC, whereas, the joint venture (JV) will take care of the vessel sourcing and financing, which includes:

• Securing funding locally and internationally.
• Shipyards selection point for VLEC assembly.
• Chartering Very Large Ethylene Carriers (VLECs) to ONGC for Ethane Transportation

According to the tender document, the deadline to submit interest is March 27.

ONGC’s C2/C3 separation facility at Dahej, constructed in 2008-09, primarily supplied separated C2-C3 compounds to Reliance Industries’ (RIL) IPCL till OPaL’s petchem facility came on stream in 2017. The C2-C3 plant has a liquefied natural gas (LNG) handling capacity of 4.9 million tonnes per annum (MTPA), whereas OPaL’s petrochemical complex comprise:

• Single feed cracker with 1.1 MTPA ethylene capacity
• Processing attached to units and polymer factories.
• Manufacturing facilities for HDPE, LLDPE, PP and Styrene Butadiene Rubber.