Petronet LNG Limited, India’s largest LNG importer, will soon form a joint venture with Japanese and Sri Lankan companies for an LNG terminal near Colombo, Petronet said in a statement today.
Sri Lanka has decided to go ahead with the setting up of an LNG terminal near Colombo with Indian and Japanese companies. The two countries in their efforts to strengthen relations have been in discussions on this issue since last more than one year. The Sri Lankan Government issued a Letter of Intent to the Govt. of India during the visit of External Affairs Minister to Colombo on September 1.
Important discussions were held between Minister of Petroleum Resources Development, Sri Lanka and Minister of Petroleum & Natural Gas, India in New Delhi in October 2016 which was followed by numerous meetings at Secretary/ Joint Secretary Level.
A Joint Venture of Petronet LNG Limited along with Japanese and Sri Lankan companies will develop an LNG Terminal in Sri Lanka to provide regassified 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 2 years after completion of initial formalities.
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. The LNG terminal near Colombo would improve economics of various power plants and also generate immense direct and indirect benefits for vast majority of Sri Lankan people.
Sri Lankan economy is growing at a rapid pace of 4 to 5% and primary energy consumption is estimated to increase to 19 MMTOE by the year 1930. As of now, 82% of the primary energy consumption is met through petroleum products and bio-mass. Not much success has been achieved so far in development of any indigenous gas fields. LNG imports is a significant solution to fuel the growth of this nation. This will also usher in green economic growth in Sri Lanka with development of a gas based economy and also reaffirm traditionally and friendly relations between two countries and their continuing endeavors to enhance bilateral relations through increased economic, investment and development cooperation for mutual benefits of the two nations.
It’s a giant step towards energy security of Sri Lanka and underscores the ‘neighbourhood first’ policy of Prime Minister Modi. It shall pave the way for further cementing primeval bonds. (Colombo Gazette)