ONGC has signed a landmark 15-year Ethane Unloading, Storage and Handling (USH) agreement with Petronet LNG at Dahej, Gujarat. This blog breaks down the capacity booking, infrastructure plans, timelines and how this deal underpins India’s next phase of petrochemical expansion and gas-based industrial growth.
Ethane is a critical feedstock for ethylene crackers, which in turn produce polymers used across packaging, automotive, infrastructure and consumer goods. Securing long-term ethane import capacity is therefore not just a logistics decision but a strategic industrial choice for India’s petrochemical sector.
ONGC Petro additions Limited (OPaL) operates one of India’s largest petrochemical complexes at Dahej, with a world-scale ethylene cracker designed to run on ethane. The new USH arrangement with Petronet LNG is designed to keep that cracker reliably supplied for years to come.
In simple terms, this deal connects global ethane supply via very large ethane carriers (VLECs) to Indian manufacturing demand, using Dahej as the critical hub.
Under the agreement, Petronet LNG will develop specialised ethane infrastructure at Dahej, including an ethane storage tank of around 170,000 cubic metres and a unique third jetty capable of handling ethane, propane and LNG. This is a step-change from traditional LNG-only terminals.
The multi-fuel jetty and storage system is designed to support flexible marine logistics, enabling ONGC and potentially other users to receive ethane at scale over the 15-year term and beyond.
For traders and risk teams, Dahej’s evolution into a multi-product terminal has implications for vessel scheduling, contract structures and long-term feedstock diversification strategies.
ONGC is reserving about 600 KTPA of ethane handling capacity at the upcoming Dahej facilities. In return, Petronet LNG expects to generate around ₹5,000 crore in gross revenue over the 15-year term, beginning in FY 2028–29 once operations commence.
The structure shifts physical and operational risk around unloading, storage and ship–shore interface to the terminal operator, while ONGC focuses on upstream sourcing and downstream conversion into petrochemicals.
For both parties, the deal also signals confidence in sustained petrochemical demand and India’s long-term push to move up the value chain from raw fuels to higher-value chemical products.
ONGC has become the first Indian CPSE to sign a long-term ethane USH services agreement with Petronet LNG, locking in handling capacity at Dahej for 15 years. The deal sits at the intersection of gas infrastructure development, petrochemical feedstock strategy and India’s push to deepen its manufacturing base in polymers and chemicals.
A 15-year binding term with commencement targeted between October and December 2028, linked to new ethane facilities at Dahej and long-duration feedstock planning for OPaL.
Petronet LNG will construct a ~170,000 m³ ethane tank and a third jetty able to handle ethane, propane and LNG, transforming Dahej into a multi-product marine import hub.
ONGC books around 600 KTPA of ethane handling capacity, while Petronet LNG expects gross revenue of roughly ₹5,000 crore over the full contract duration.
The agreement signals confidence in long-term petrochemical demand and complements India’s broader agenda of moving from raw hydrocarbon exports to higher-value downstream production.
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Petronet LNG expects to earn around ₹5,000 crore in gross revenue over the 15-year ethane USH contract period, creating a stable fee-based income stream.
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ONGC secures approximately 600 KTPA ethane handling capacity at Dahej, anchoring long-term feedstock supply for its petrochemical ecosystem.
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An ethane storage tank of around 170,000 m³ will be developed at Dahej, designed to support receipt from VLECs and efficient onward deliveries.
For ONGC, the ethane USH agreement is part of a broader shift from being purely an upstream oil and gas company towards a fully integrated energy and petrochemicals player. Long-term ethane logistics capacity at Dahej allows it to support OPaL and other downstream ventures with predictable feedstock.
For Petronet LNG, the deal diversifies revenue streams beyond LNG regasification and positions Dahej as a multi-fuel import platform for the next wave of Indian industrial growth. For markets, it provides another anchor signal that India’s demand for petrochemical inputs will remain structurally strong through the 2030s.
The 15-year ethane USH agreement builds on years of planning around OPaL, Dahej infrastructure and India’s petrochemical ambitions. This high-level timeline connects the dots for traders, risk teams and strategists.
ONGC and partners commission OPaL at Dahej as a world-scale ethylene cracker complex, built around ethane as a key feedstock. The long-term strategic need: secure imported ethane at competitive terms.
Outcome: Clear anchor demand for ethane emerges on India’s west coast.
Petronet LNG frames its Dahej expansion not only around LNG but also new capabilities to handle ethane and propane, including the concept of a third multi-fuel jetty and dedicated ethane storage.
Outcome: Terminal design evolves from single-product LNG to a broader marine energy hub.
ONGC and Petronet LNG negotiate a long-term USH services structure, aligning ethane volumes, capacity reservation, tariff mechanisms and commencement windows with project construction timelines.
Outcome: Commercial framework agreed, paving the way for a binding term sheet.
On 3 December 2025, ONGC and Petronet LNG sign a 15-year Ethane Unloading, Storage and Handling (USH) Services Binding Term Sheet at ONGC’s corporate office in New Delhi, formally locking in capacity and commercial terms.
Outcome: ONGC becomes the first CPSE to secure such long-term ethane USH capacity.
Petronet LNG advances construction of the ethane storage tank and third jetty at Dahej. The contract is scheduled to commence between October and December 2028, with ethane flows expected in FY 2028–29, supporting OPaL and future downstream expansions.
Outcome: Ethane logistics become a core part of India’s west-coast energy and chemicals map.
Official filing describing the 15-year ethane USH term sheet, capacity booking, revenue expectations and construction plans at Dahej.
View Filing (PDF) →Business and energy media coverage summarising the ONGC–Petronet deal, term length, capacity numbers and projected revenues.
Business Standard Energy News →PSU-focused coverage of ONGC’s role as the first CPSE to secure long-term ethane USH capacity and what this means for India’s industrial strategy.
Read PSU Connect Article →The agreement is between Oil and Natural Gas Corporation (ONGC) and Petronet LNG Limited (PLL). ONGC is the capacity holder and importer of ethane, primarily for its downstream petrochemical operations, while Petronet LNG will provide unloading, storage and handling services at Dahej.
USH services include receiving ethane from ships at the Dahej jetty, unloading it into dedicated infrastructure, storing it safely in large cryogenic tanks and then delivering it back to ONGC at defined delivery points for further transport to end-use facilities such as OPaL.
The term is 15 years, with commencement scheduled between October and December 2028. The actual start date will be aligned with the commissioning of Dahej’s new ethane infrastructure and related facilities.
With reserved ethane capacity at Dahej, ONGC can plan long-term ethane procurement via VLECs, reducing feedstock uncertainty for OPaL’s ethylene cracker. This improves utilisation, cost planning and the ability to commit to downstream customers with greater confidence.
Key signals include progress on Dahej construction milestones, any revisions to capacity or tariffs, movements in global ethane and LPG markets, changes in Indian petrochemical demand, and policy shifts impacting gas and chemical feedstocks.