Petronet India to form JV to build LNG plant in Colombo
Petronet LNG, the main Indian importer of natural gas, issuing a statement has noted that the company has decided to enter into a joint venture in the near future with Japanese and Sri Lankan firms to build a LNG plant to be situated close to Colombo.
The Government of Sri Lanka (GoSL) is reported to have granted a letter of intent to the Government of India permitting it to construct the LNG terminal so that it could provide regassified natural gas to Sri Lanka’s power-plants and transport industry.
The Economic Times has quoted Petronet as stating, “A joint venture of Petronet LNG along with Japanese and Sri Lankan companies will develop an LNG Terminal in Sri Lanka to provide re-gassified natural gas to various power plants, domestic and transport sectors in Sri Lanka.”
“The capacity of the LNG terminal will be decided upon the gas demand in Sri Lanka and is expected to be developed in two years after completion of initial formalities,” Petronet has added.
The Indian media has reported that Petronet, controlled by state oil firms, is India’s largest LNG importer. It operates two LNG terminals in India and is now aiming to build one each in Sri Lanka and Bangladesh.
“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. The Colombo Metropolitan Area is inhabited by more than 5 million people or roughly 25% of the total population of Sri Lanka generating over 50% of the GDP,” Petronet has said in the statement.
This move will encourage other LNG providers to consider similar options in the country. Also as the government of Sri Lanka intends to promote power generation through LNG, energy companies may view this expansion as an encouraging sign to enter the country’s energy industry.
The government of Sri Lanka has started looking for solutions to address the rapidly increasing demand for power and the looming energy crisis by 2020.
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