MUMBAI: A joint venture (JV) between state-owned Oil and Natural Gas Corporation Ltd (ONGC) and Japan’s Mitsui O.S.K. Lines, Ltd (MOL) has picked South Korea’s Samsung Heavy Industries Co., Ltd to build two very large ethane carriers in a deal worth about $370 million, multiple sources said.
Samsung Heavy Industries is one of the “Big Three” shipbuilders in South Korea and one of the world’s largest.
The shipbuilding contract will be signed on Tuesday at the ‘India Energy Week’ event being held in Goa, a government official and one of the sources cited earlier said.
The ONGC-MOL team had floated an enquiry for building the two very large ethane carriers in which Samsung Heavy Industries emerged the successful yard, the official said. Building a third very large ethane carrier will be decided “later”, the government official added.
“Samsung Heavy Industries boasts the world’s best track record in designing and constructing very large ethane carriers,” a shipbuilding industry executive said. Samsung Heavy Industries has extensive experience operating dedicated ethane cargo tanks (an improved version of the GTT Mark III), he added, noting that Mitsui O.S.K. Lines has built very large ethane carriers, very large gas carriers and liquefied natural gas (LNG) carriers at Samsung.
The two very large ethane carriers will be owned and operated by separate special purpose vehicles set up in the Gujarat International Finance Tec-City (GIFT City) in which ONGC and MOL will each hold 50 per cent stake.
The two very large ethane carriers will be used for hauling ethane to the Dahej, Gujarat-based petrochemical plant run by ONGC Petro additions Ltd (OPaL), a subsidiary of ONGC.
ONGC will source and supply 800 kilo tonnes per annum (KTPA) of ethane from the United States – the biggest ethane market – to secure the feedstock for OPaL’s dual feed cracker plant capable of using a mix of Naphtha and C2 (Ethane), C3 (Propane) an C4 (Butane), from May 2028.
