ONGC unit says production at Dahej plant constrained
TL;DR
ONGC's Opal unit reports production constraints at its Dahej petrochemical plant due to planned maintenance and technical issues, including a shutdown in 2025. This, combined with high crude oil prices and a shift to domestic focus, is expected to increase resin price volatility and cost pressures in India's polyolefins market through mid-2026.
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ONGC unit says production at Dahej plant constrained
ONGC Petro Additions Limited (Opal) has announced production constraints at its Dahej petrochemical complex, citing planned maintenance and technical issues. The facility, which produces 1.1 million tons of ethylene and 400,000 tons of propylene annually, is scheduled for a turnaround in April 2026, temporarily halting operations at key units. This follows an unexpected five-day shutdown of its 340,000 t/yr polypropylene (PP) unit in May 2025 due to a technical fault, compounding supply challenges.
The Dahej plant's production disruptions coincide with elevated upstream costs driven by record crude oil prices, which have surged to eight-year highs amid geopolitical tensions. These pressures are expected to narrow ethylene-to-polyethylene and propylene-to-naphtha spreads, potentially amplifying resin price volatility in the short term. Opal's shift from export-focused operations to a Domestic Tariff Area (DTA) status in March 2025 further complicates supply dynamics, as the company prioritizes domestic markets to improve competitiveness.
Financially, Opal has faced significant losses in recent years, prompting ONGC to inject Rs 18,365 crore in capital and debt restructuring to stabilize operations. Analysts note that prolonged production outages and constrained feedstock availability could exacerbate market volatility, particularly as new polymer producers and imports intensify domestic competition. With global oil prices remaining elevated and Opal's Dahej plant undergoing operational adjustments, the Indian polyolefins market is likely to experience sustained cost pressures through at least mid-2026.
