ONGC Partners Mitsui OSK Lines to Enter Ethane Shipping

• ONGC partners with Japanese shipping major Mitsui OSK Lines to expand in specialised energy transportation
• ONGC invests in two GIFT City-based JVs, each owning a Very Large Ethane Carrier (VLEC) to transport ethane from the US for OPaL
• The project supports the Maritime Amrit Kaal Vision 2047, promoting self-reliance, advanced maritime infrastructure, and economic resilience

Oil and Natural Gas Corporation (ONGC) made an announcement recently about its strategic collaboration with Mitsui OSK Lines (MOL), the largest shipping company in Japan, aimed at increasing its presence in the niche market of energy transportation.

The partnership is backed by joint venture and capital contribution agreements, which were disclosed in a filing to the stock exchange.

As part of the deal, ONGC is set to put its money into the two new joint venture companies - Bharat Ethane One IFSC Private Limited and Bharat Ethane Two IFSC Private Limited - both of which are incorporated in GIFT City, Gandhinagar.

The project has received the backing of the Ministry of Petroleum and Natural Gas and the Department of Investment and Public Asset Management (DIPAM) under the Ministry of Finance.

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ONGC, a Maharatna PSU, will buy 2,00,000 equity shares from each of the two entities at ₹100, thus pleasuring a 50% ownership in each company while MOL will have the other half of the holdings.

Every venture will have ownership and the right to operate a Large Ethane Carrier (LEC) carrying an Indian flag. These high-capacity vessels will be on the US route to transport ethane to supply feedstock for ONGC Petro Additions Limited, a company owned by the state-run energy giant.

The project is also in line with the government’s Maritime Amrit kaal Vision 2047, which envisages a national area of self-sufficiency in the maritime sector, building of first-class maritime infrastructure, and facilitating economic resilience in the long run.

Oil and Natural Gas Corporation stated, “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”. This cooperation is a major stride for ONGC in the direction of making India an able player in the field of specialized maritime energy logistics.