Petronet LNG, India’s biggest player in liquefied natural gas, is planning to set up a re-gassification terminal in Sri Lanka as part of a strategy to expand its footprint outside the country. Earlier, it has started negotiations to set up a similar project in Bangladesh.
“We have proposed the setting up of a 1million-tonne terminal in Sri Lanka,” Prabhat Singh, managing director and CEO, Petronet LNG, told FE. Currently, a 5 million-tonne-per-annum (mtpa) terminal costs around Rs 4,500-5,000 crore.
Singh said that by 2020, Petronet would double its storage capacity to 30 million tonnes. Its Dahej terminal, with 15 million-tonne capacity, is operating at 120% capacity. Another 5 million-tonne terminal in Kochi is operating below 10% capacity due to a lack of evacuation facility.
Petronet’s aim to set up a re-gassification terminal in Sri Lanka is expected to get a diplomatic push from the Modi government. On July 4, petroleum minister Dharmendra Pradhan had discussed economic cooperation with the island nation’s minister of international trade Malik Samarawickram in New Delhi. “We had a detailed discussion on expanding oil and gas cooperation with Sri Lanka,” Pradhan said after the meeting.
New Delhi-based Petronet is also in advanced talks to set up an LNG terminal in Bangladesh. “We are going to set up a terminal in Bangladesh. Why should we restrict to Indian shores? We have already sent a proposal to Bangladesh. They requested for a terminal of 3.75 million tonnes, but we have told them that we would set up a 5-mt terminal. Plus, it would be expandable,” Singh said.
Apart from growth through capacity expansion, the management (of Petronet) guided that further growth could come from setting up of terminals in Bangladesh and Sri Lanka. The second avenue of growth is developing usage of LNG (before re-gassification) as an automobile fuel in India, said brokerage firm Motilal Oswal in a recent report.
Petronet is on track to complete the nameplate capacity expansion at Dahej terminal from 10 mtpa to 15 mtpa by end-2016. This would be further expanded to 17.5 mtpa.