Petronet LNG Shares Rise After 15-Year Ethane Handling Deal with ONGC

Petronet LNG has taken a significant step in expanding its energy infrastructure. The company recently signed a 15-year ethane unloading, storage, and handling agreement with ONGC, boosting investor interest and giving a clear direction to its long-term strategic growth.

With its shares moving up over 4% on December 4, this deal highlights Petronet LNG’s efforts to diversify beyond LNG and strengthen its position in India’s petrochemical and energy supply chain.

Market Performance Snapshot

Petronet LNG shares opened strong, climbing to ₹279.80 apiece, snapping a five-session losing streak. The recent rise reflects market attention on the company’s expanding capabilities and infrastructure initiatives.

Main News: The Ethane Agreement with ONGC

The core of this development lies in Petronet LNG’s ethane storage and handling facility at Dahej, Gujarat. Here’s what the agreement entails:

• Petronet LNG will develop ethane unloading, storage, and handling (USH) facilities with a storage capacity of around 1,70,000 cubic meters.
• The company is constructing a third jetty at Dahej, capable of handling ethane, propane, and LNG, making it a unique facility in India.
• ONGC will reserve the capacity of roughly 600 KTPA at these facilities for ethane sourced or imported by the company or its affiliates.
• Petronet LNG will receive, store, handle, and redeliver ethane to ONGC at the designated delivery point.

Over the 15-year contract, Petronet LNG is expected to earn gross revenue of around ₹5,000 crore, starting from FY 2028–29. This project strengthens Petronet LNG’s role in supporting India’s petrochemical industry, particularly ONGC Petro Additions Limited (OPaL), which operates one of the country’s largest ethylene cracker units.

Company Infrastructure & Strategic Expansion

Petronet LNG continues to build world-class infrastructure to support the growing energy and petrochemical markets:

• Dahej Facility: Will be the first in India capable of handling ethane, propane, and LNG for third-party imports.
• The unique third jetty enhances import and handling capacity, enabling downstream growth for sectors like petrochemicals.
• The project ensures assured capacity for ONGC to meet feedstock requirements at OPaL.

The deal is signed at ONGC’s corporate office in New Delhi, with top executives from both companies present, highlighting its strategic importance.

Financial & Operational Snapshot

While the deal is long-term, it also adds measurable financial potential:

• Gross Revenue (15-year contract): ₹5,000 crore
• Facility Capacity: 1,70,000 cubic meters of ethane
• Reserved Capacity for ONGC: 600 KTPA

Petronet LNG’s infrastructure investments underline its commitment to expanding beyond LNG, offering comprehensive ethane and propane import services, and boosting India’s energy value chain.

Summary

Petronet LNG’s 15-year ethane agreement with ONGC positions the company as a key player in India’s petrochemical and energy sectors. With the development of a unique USH facility and third jetty at Dahej, the company not only strengthens its operational capabilities but also sets the stage for long-term revenue generation of around ₹5,000 crore over the next 15 years. The rise in share price reflects the market’s focus on Petronet LNG’s strategic growth and diversified energy infrastructure.