Shares of Petronet LNG Ltd rallied 4% on 4 December after the company announced a 15-year binding term sheet with ONGC for ethane unloading, storage, and handling (USH) services.  

In an exchange filing filed in the post-market hours of 3 December, the business stated that Oil and Natural Gas Corporation (ONGC) and Petronet LNG had entered into an agreement that would take effect between October and December 2028.

“PLL is developing ethane unloading, storage and handling (USH) facilities with ethane storage tank capacity of approx. 1,70,000 Cubic Meters at Dahej, Gujarat. PLL is also constructing a unique third jetty at Dahej which will be capable of handling Ethane and Propane in addition to LNG,” the firm said.

According to the term sheet, ONGC would reserve about 600 KTPA of ethane storage and processing capacity at Petronet LNG’s facilities in Dahej, Gujarat. PLL will receive, store, and handle ethane sourced and imported by ONGC or its subsidiaries and affiliates in Dahej, Gujarat, and redeliver it to ONGC at the delivery point.

Petronet LNG is estimated to generate over Rs 5,000 crore in gross income over the course of the 15-year contract, according to the contractual term sheet signed with ONGC. The deal will start in fiscal year 2028-2029. 

The filing added, “It represents a significant milestone in PLL’s strategic vision to develop and offer ethane import infrastructure to third parties, thereby expanding its business portfolio beyond LNG and strengthening its position in India’s petrochemical and energy value chain.”

“PLL’s under-construction unique third jetty will facilitate unloading, storage and handling ethane, propane and LNG at Dahej and will be first-of-its-kind in India which shall be made available for third-party imports. This step of PLL underscores its commitment for enabling growth of downstream industries such as Petrochemical sector through world-class import infrastructure for ethane and propane in addition to its existing LNG regasification infrastructure,” it added.

Petronet LNG stated that the agreement provides ONGC with guaranteed capacity booking for the import of ethane to meet the feedstock requirements of ONGC Petro Additions Limited (OPaL), which operates one of India’s largest petrochemical complexes in Dahej, Gujarat, which includes a world-scale ethylene cracker unit that uses ethane as the primary feedstock.  

The deal between ONGC and Petronet LNG was signed at ONGC’s corporate office in New Delhi by ONGC Chairman and MD Arun Kumar Singh and Petronet LNG MD and CEO Akshay Kumar Singh.

At 1:10 pm, the shares of Petronet LNG were trading 4.40% higher at Rs 280.60 on NSE. 

Tired of guessing stocks to trade in daily?
Unicorn Signals empowers you with powerful tools like daily stock scans for Intraday, Swing & Investing, Market Predictions and much more. Download the Unicorn Signals app today and take control of your investments!