Indian Petronet to Form JV to Build LNG Terminal in Sri Lanka

Indian Petronet LNG will soon form a joint venture with Japanese and Sri Lankan companies to build an LNG terminal near Colombo, it said September 6.

Petronet did not name the Japanese and Sri Lankan companies. 

The Sri Lankan government issued a letter of intent to the Indian government regarding the plan during the visit of Indian foreign minister Sushma Swaraj to Colombo September 1. Indian and Sri Lanka have been in discussions on this issue for more than a year.

A joint venture of Petronet LNG with Japanese and Sri Lankan companies will develop an LNG terminal in Sri Lanka to provide regassified natural gas to various power plants, domestic and transport sectors in Sri Lanka. The capacity of the LNG terminal will be decided upon based on the gas demand in Sri Lanka. It is expected to be developed within two years after the completion of initial formalities.

The LNG terminal would be set up on the western coast of Sri Lanka in close vicinity of Colombo where most of the power projects (operating mainly on costly liquid fuel) are located.

With global LNG prices ruling at attractive levels, the Sri Lankan government is keen to bring the fuel into the country's overall energy mix. The overall demand for energy is growing at a fast pace in the south Asian nation. With not much success achieved so far in the development of any indigenous gas fields, LNG imports is a significant solution to meet growing energy demand.

Shardul Sharma