Indian LNG importer Petronet LNG said that it plans to establish a joint venture (JV) with Japanese and Sri Lankan companies to develop a liquefied natural gas (LNG) terminal in Sri Lanka.
The LNG import terminal, which will be built on the western coast near Colombo, will deliver regassified natural gas to various power plants and also to domestic and transport sectors.
Petronet LNG stated that the capacity of the Sri Lankan LNG terminal is yet to be decided. The Indian firm said that the capacity will be based on the gas demand in Sri Lanka and is likely to be developed in two years time after concluding initial formalities.
According to Petronet, the new LNG terminal is expected to boost economics of power plants near Colombo that mainly operate on liquid fuel. Besides, it would create immense direct and indirect benefits for vast majority of Sri Lankans.
Petronet LNG stated: “LNG imports is a significant solution to fuel the growth of this nation.
“This will also usher in green economic growth in Sri Lanka with development of a gas based economy and also reaffirm traditionally and friendly relations between two countries and their continuing endeavors to enhance bilateral relations through increased economic, investment and development cooperation for mutual benefits of the two nations.”
Earlier in the month, the Sri Lankan government wrote a letter of intent to the Indian government for the setting up of the LNG terminal.
Prior to that, key discussions were held between government officials of the two countries in October 2016 to give shape to the Colombo LNG terminal project.
In May, several media publications reported that the LNG terminal will be built with an investment of $250m and will have a capacity of up to 2 million tonnes.
Image: Meeting between Indian and Sri Lankan officials relating to the LNG terminal project. Photo: courtesy of Petronet LNG Limited.