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Petronet, Japanese co to set up $300 mn LNG terminal in Sri

Press Trust of India  |  New Delhi 

Ltd, Indias biggest importer of gas, and its Japanese partners will invest USD 300 million to set up Sri Lanka's first liquefied (LNG) terminal near Colombo, its said.

The Indo-Japanese partnership will set up a 2.6-2.7 million tonnes a year floating LNG receipt facility off the island's western coast, bigger than the previously envisaged 1.5-2 million tonnes a year facility.

Petronet will hold 47.5 per cent stake in the project while Japan's and will take 37.5 per cent stake. The remaining 15 per cent will be held by a Sri Lankan entity, he said.

"We are in the process of signing MoU with the Sri Lankan government for setting up of the LNG terminal," Singh said. "Once the MoU is signed this month, some project related studies will be done before beginning work on the terminal."

Explaining the reasons for setting up a bigger capacity LNG terminal, he said requires 2.5-3 million tonnes of to fire power plants. Besides, there is demand for CNG and smaller industries.

"Commercial details like exact size of the plant and investment will be worked out in the detailed feasibility report to be commissioned after signing of the MoU. Broadly, it would be about USD 300 million investment," he said.

had in September last year issued a Letter of Intent to the company to build a floating LNG import facility to to power plants and the transport sector in the island nation.

The import terminal is to be set up at Kerawalapitiya on the

has plans to build a 300-mw gas-fired power plant in Kerawalapitiya adjoining an existing power plant. The existing plant, which uses 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 supercooled natural gas in ships, will take 2-3 years to build, the top said.

The terminal in is part of Petronets vision to own 30 mt per annum of LNG import and regasification capacity by 2020.

Petronet already operates a 15 million tonnes per annum import facility at Dahej in and has another 5 million tonnes terminal in Kochi in It has signed preliminary agreement to build a 7.5 million tonnes tonnes in and is also looking at setting up a smaller facility in

Singh said Dahej is also being expanded to 17.5 mt over the next two years.

The India-collaboration comes after a string of Chinese successes in Sri Lanka. 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.)

First Published: Sun, February 11 2018. 12:25 IST