ONGC Goes Global: 50:50 Shipping Tie-up with Mitsui OSK to Boost Value Chain
ONGC's new 50:50 joint venture with Japan's Mitsui O.S.K. Lines (MOL) marks a bold entry into specialized ethane shipping, securing logistics for its petrochemical arm OPaL.
Signed January 5, 2026, this $370 million deal builds two Very Large Ethane Carriers (VLECs) to transport US ethane to Dahej from mid-2028.
Deal Structure
Two IFSC entities in GIFT City—Bharat Ethane One and Two—each own one VLEC, with ONGC and MOL holding equal 50% equity.
ONGC subscribes 200,000 equity shares (₹100 each) per JV; vessels built at South Korean shipyards.
This integrates upstream oil/gas with downstream petrochemicals, de-risking OPaL's feedstock amid rising US ethane demand.
Strategic Rationale
ONGC diversifies beyond exploration into energy logistics, leveraging MOL's expertise in LNG (Petronet) and ethane (Reliance) carriers.
Tie-up aligns with Maritime Amrit Kaal Vision 2047 for self-reliance, backed by Petroleum Ministry and DIPAM.
Controls value chain end-to-end: sourcing US ethane → shipping → OPaL's Dahej cracker (India's largest dual-feed).
Market Impact
ONGC shares rose 0.7% to ₹244 post-announcement, signaling investor nod to global push.
Boosts earnings via logistics margins; reduces spot charter volatility for OPaL, targeting 4.9 MMTPA gas processing.
Positions ONGC as petrochemical logistics player amid India's import reliance (OPaL uses ethane/propane).
Comparison: Partners' Expertise
| Aspect | ONGC Contribution | MOL Contribution |
|---|---|---|
| Equity | 50% ($185M est.) | 50% ($185M est.) |
| Ops | Regional footprint, OPaL demand | Global maritime, 4 LNG + 6 ethane ships |
| Ships | Indian-flag VLECs | Korean build, tech for cryogenics |
| Timeline | Ops mid-2028 | Proven US-India routes |
Future Outlook
Vessels enable scalable ethane imports, cutting costs 15-20% vs. charters; potential expansion to propane/LPG.
Supports ONGC's $2.3B capex for diversification; watch Q3 FY26 filings for JV progress.
Your PSU energy focus: Pairs with NTPC/Oil India for integrated plays amid Budget 2026 infra push.
.png)
.png)
COMMENTS