Oil and Natural Gas Corporation of India has entered into an agreement with Japanese shipbuilding company Mitsui O.S.K. Lines. As per the agreement, Mitsui O.S.K. Lines will build, own and operate two Very Large Ethane Carriers (VLEC), which will be used by ONGC for the import of ethane.

According to an exchange filing by ONGC, the two companies signed a Heads of Agreement on July 3. The company said the arrangement is further subject to the approval of the Board of Directors.

The partnership will involve a joint venture, with ONGC holding at least 26% and MOL owning the rest, and the total cost of the two ships is estimated at $370 million.

Additionally, ONGC said that the Very Large Ethane Carriers will be used by ONGC Petro Additions Limited (OPal), a subsidiary of the company, for importing ethane. The VLEC is a specialised ship used for the transportation of ethane gas over long distances. The ship has a capacity of carrying about 150,000 cubic meters of liquefied ethane.