Feb 11, New Delhi: India's largest importer of liquefied natural gas (LNG) company Petronet LNG Ltd, and its Japanese partners will invest USD 300 million to set up Sri Lanka's first LNG terminal near Colombo, its CEO Prabhat Singh has said.
The Indo-Japanese partnership will set up a 2.6-2.7 million tonnes a year floating LNG receipt facility off Sri Lanka's western coast, bigger than the previously envisaged 1.5-2 million tonnes a year facility, a PTI report said.
Petronet will hold 47.5 percent stake in the project while Japan's Mitsubishi and Sojitz Corp will take 37.5 percent stake. The remaining 15 per cent will be held by a Sri Lankan entity, he said.
Singh said Petronet is in the process of signing a MoU with the Sri Lankan government for setting up of the LNG terminal and 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 Sri Lanka requires 2.5-3 million tonnes of liquid gas 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.
Sri Lankan government had in September last year 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.
The import terminal is to be set up at Kerawalapitiya on the west coast.
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 tonne per annum of LNG import and re-gasification capacity by 2020.
Petronet LNG Ltd is an Indian oil and gas company formed by the government of India to import liquefied natural gas and set up LNG terminals in the country.