Petronet LNG will form a joint venture to construct an LNG terminal to support power plants and transport sectors in Sri Lanka.
The company will form a joint venture with Japanese and Sri Lankan companies following discussions between Sri Lanka's minister of petroleum resources development and India's minister of petroleum and natural gas last year.
The JV will develop the terminal to provide regassified natural gas to power plants, domestic and transport services in Sri Lanka. The capacity of the terminal, near Colombo, will be decided on the gas demand in Sri Lanka and is expected to be developed in two years.
The facility will be situated close to where most of the power projects are located.
In a statement, Petronet says: 'The LNG terminal would improve economics of various power plants and also generate immense direct and indirect benefits for the vast majority of Sri Lankan people.
'LNG imports is a significant solution to fuel the growth of this nation. It is a giant step towards the energy security of Sri Lanka.'