Daijiworld Media Network – New Delhi
New Delhi, Jan 29: India’s oil and gas major ONGC will shortly issue an Expression of Interest (EoI) to invite prospective investors for picking up its stake in ONGC Petro additions Ltd (OPaL), its fully-owned petrochemicals subsidiary and one of its biggest greenfield investments.
ONGC currently holds 95.5% stake in OPaL, while GAIL India owns 4.19% and Gujarat State Petroleum Corporation (GSPC) holds 0.12%.
Speaking to reporters on the sidelines of India Energy Week on Thursday, ONGC Director (Strategy & Corporate Affairs) Arunangshu Sarkar said OPaL has now become a subsidiary and ONGC has been mandated to dilute its stake by 2030, restoring the company to a joint venture structure through a global tender, including a domestic partner.
Sarkar said the company is preparing to float an EoI soon, though it has time until 2030, which is the government’s asset monetisation deadline.
When asked if ONGC could consider listing OPaL in case it fails to bring in a strategic partner, Sarkar indicated that stake dilution could also be done through taking the petrochemicals company public, without giving further details.
He also ruled out any immediate expansion of OPaL’s Dahej facility, which currently has a capacity of 1.9 million tonnes.
On the expected impact of Qatar’s move to stop ethane exports from 2028 — a key feedstock for OPaL — Sarkar said the company has decided to make independent arrangements for sourcing ethane, including owning large ethane carriers. He added that ONGC has entered into a joint venture with Samsung for building two very large ethane carriers, which are expected to be ready well ahead of the 2028 deadline.
OPaL’s annual ethane requirement is around 600 kilo tonnes. Each carrier will have a capacity of 50 kilo tonnes, with an estimated 12 trips per vessel annually. The ships will be built in South Korea and delivered in time for the transition period when Qatar begins supplying only lean gas or pure methane.
Sarkar said the project will be financed through a combination of equity and loans, adding that the overall cost would not be very high.
Qatar has been supplying ONGC rich gas through LNG, which includes methane along with ethane, propane, butane and heavier components, enabling ONGC to extract ethane from LNG. However, from 2028, Qatar will supply only methane as it plans to use ethane domestically for its own petrochemical plants.
OPaL’s Dahej facility began operations in March 2017 and today manufactures a wide range of petrochemical products used across sectors including plastics, packaging, rubber, yarns, fabrics, agriculture, automobiles and the food industry.
The company produces around 14 lakh tonnes of polymers and 5 lakh tonnes of chemicals, including 1,100 kilo tonnes of ethylene and 400 kilo tonnes of propylene, along with associated units such as pyrolysis gasoline hydrogenation, butadiene extraction and benzene extraction.