COLOMBO: India’s largest LNG importer Petronet LNG will set up a joint venture with Sri Lankan and Japanese companies to realise the project. The decision comes after almost a year of discussions at government level. Talks were initiated in October 2016 at a meeting in New Delhi between the Sri Lankan Minister of Petroleum Resources Development and India’s Minister of Petroleum & Natural Gas.
The capacity of the new LNG terminal remains to be determined and the selection of the Japanese partners in the venture has also to be decided. After the completion of formalities, the construction of the facility is expected to take two years. It is understood that the LNG imports will be used for domestic and transportation purposes. The new terminal will be built near Colombo, and Sri Lanka is looking to construct a gas-fired power plant in Kerawalapitiya, next to an existing oil-fired plant, which will eventually switch to using LNG. The new Sri Lankan terminal initiative forms part of Petronet’s ambitions to increase its LNG import and regasification capabilities. In India, the group already has an import facility in Dahej in Gujurat and a terminal at Kochi in Kerala. It has also inked a preliminary agreement to build an LNG terminal in Bangladesh.