ONGC-Led Consortium Signs VLEC Shipbuilding Deal to Strengthen India’s Energy Security

In a major step towards safeguarding India’s energy supply chain, a consortium led by Oil and Natural Gas Corporation Limited (ONGC) has signed shipbuilding contracts for two Very Large Ethane Carriers (VLECs). The agreements were inked with South Korea’s Samsung Heavy Industries (SHI) on January 27, 2026, marking a crucial milestone in India’s broader push towards long-term energy self-reliance.

Key Details of the Deal:
Partnership: The VLECs will be owned and operated by two joint venture companies established by ONGC in collaboration with Japanese shipping major Mitsui O.S.K. Lines (MOL) at GIFT City, Gujarat.

Builder: Samsung Heavy Industries, globally recognised for its expertise in advanced gas carrier construction, has been selected to build the vessels.

Specifications: Each ship will sail under the Indian flag and feature a large cargo capacity of one lakh cubic metres.

Purpose: The VLECs will establish a dedicated maritime corridor to transport nearly 600,000 tonnes per annum (KTPA) of ethane from the United States to India. This ethane will be used as a key feedstock for ONGC Petro additions Limited (OPaL), a subsidiary of ONGC.

Timeline: Delivery of the vessels is planned for FY 2028–29.

Strategic Significance for India:
The project, undertaken with guidance from the Ministry of Petroleum & Natural Gas and the Department of Investment and Public Asset Management (DIPAM), is viewed as a cornerstone of India’s energy security strategy. It directly advances several national priorities:

Strengthening Energy Logistics: Establishes dedicated, Indian-controlled shipping capacity for a vital petrochemical input, reducing dependence on volatile spot markets and foreign-owned fleets.
Enhancing Supply Chain Resilience: Ensures a stable, long-term supply of ethane, supporting uninterrupted operations across downstream petrochemical value chains critical to domestic manufacturing.
Building Niche Maritime Expertise: Positions India in the specialised and high-value segment of VLEC ownership and operations, enabling the development of technical expertise and strategic capabilities.
Advancing Self-Reliance: Closely aligns with the Prime Minister’s Maritime Amrit Kaal Vision 2047 and the Atmanirbhar Bharat initiative, fostering an ecosystem anchored in sustained economic and energy resilience.

The swift finalisation of this trilateral collaboration involving India, Japan and South Korea highlights a shared commitment to strengthening global energy supply chains through strategic industrial cooperation.