ONGC’s OPaL Exits From Dahej SEZ

New Delhi: ONGC PetroAdditions Ltd (OPaL), a subsidiary of the state-owned Oil and Natural Gas Corporation (ONGC), has relinquished its ‘only-for-export’ unit status as it aims to tap into the booming local petrochemical market to drive a turnaround.

In a stock exchange filing, ONGC said OPaL has received the final approval for its exit from the Dahej Special Economic Zone (SEZ).

“Accordingly, OPaL shall operate as a Domestic Tariff Area (DTA) unit with effect from March 8, 2025,” ONGC said. “Further, this exit from SEZ will improve the competitiveness of OPaL for supplies to be made to the DTA”.

This essentially means primarily catering to the domestic Indian market instead of focusing on exports, which is the primary purpose of an SEZ unit. It will now not have to pay customs duty on products sold within India, helping improve margins. The move is primarily to gain access to the wider domestic market and potentially benefit from the lower corporate tax regime.

ONGC’s C2C3 project extracts ethane (C2) and propane (C3) from the liquefied natural gas (LNG) imported from Qatar. C2 and C3 - the basic building blocks of petrochemicals - are provided to OPaL, which uses them to make polymers and chemicals like benzene and butadiene.