Petronet LNG is planning build a Liquefied Natural Gas (LNG) import terminal in Sri Lanka in collaboration with Japanese and Lankan companies. The Sri Lankan government issued a Letter of Intent (LoI) to the Indian government in this regard on 1 September, 2017.
The company said the following,
"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,” Petronet said. The capacity of the LNG terminal will be decided upon the gas demand in Sri Lanka and is expected to be developed in 2 years after completion of initial formalities."
Petronet, controlled by state oil firms, is India’s largest LNG importer. It operates two LNG terminal in India and is 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.