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Petronet LNG Ltd, India's biggest importer of gas, will partner with Japan's Mitsubishi and Sojitz Corp to set up Sri Lanka's first liquefied natural gas (LNG) terminal near Colombo, its CEO Prabhat Singh said today.
"Petronet will be the leader of the joint venture with the largest shareholding," he told reporters after the company's annual general meeting here.
Without disclosing the shareholding, he said the Sri Lankan government will also be a partner in the project.
Petronet officials will visit Tokyo this month and Colombo in October to finalise the project details, he said.
Sri Lankan government had earlier this month issued a Letter of Intent to the company to build a floating LNG import facility to supply gas to power plants and the transport sector in the island nation.
While the capacity of the import terminal, to be set up at Kerawalapitiya on the west coast, is yet to be decided, Petronet had in its proposal to the Sri Lankan government proposed a 2-million tonne facility that would cost about USD 250 million.
Sri Lanka has plans to build a 300-mw gas-fired power plant in Kerawalapitiya adjoining an existing power plant. The existing plant, which uses oil to generate power, will also be converted to LNG once the terminal is set up and gas imports start.
LNG has become significantly cheaper in the last year and many countries have started switching their power plants to LNG.
The LNG terminal, which will import super-cooled natural gas in ships, will take 2-3 years to build, the top executive said.
The terminal in Sri Lanka is part of Petronet's vision to own 30 mt per annum of LNG import and re-gasification capacity by 2020.
Petronet already operates a 15-mt per annum import facility at Dahej in Gujarat and has another 5-mt terminal in Kochi in Kerala. It has signed preliminary agreement to build a 7.5-million tonnes LNG terminal in Bangladesh and is also looking at setting up a smaller facility in Mauritius.
Singh said Dahej is also being expanded to 17.5 mt over the next two years.
The India-Japan collaboration comes after a string of Chinese successes in Sri Lanka. China has managed to revive its flagship USD 1.4-billion Colombo Port City project and is also engaged in expansion of major infrastructure projects it built in the past.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)