India to Supply LNG to Sri Lanka, Plans Offshore Terminal

India is set to commence supplying liquefied natural gas (LNG) to Sri Lanka by the end of the following year, with plans to establish an offshore regasification terminal at the Colombo port.

Supply Arrangements of LNG and Terminal Construction:

Petronet LNG, India’s largest LNG terminal operator, will handle the gas supply using tankers and oversee the terminal’s construction and operation. 

The company aims to supply approximately 850 tonnes of LNG daily to Sri Lanka over five years, totaling around 350,000 tonnes annually.

The LNG will be transported via tankers to Colombo, with an estimated requirement of 50 tankers per day. The average supply frequency will be once every two days using ships capable of accommodating 100 such tankers.

Planned Floating Storage Regasification Unit (FSRU):

A floating storage regasification unit (FSRU) is planned to be in commission by 2028. The investment for the FSRU project is estimated at approximately Rs 2,500 crore, pending formal approval from the Sri Lankan government.

Petronet LNG will utilize the Kochi terminal for gas supply to Sri Lanka, enhancing the unit’s capacity utilization.

Additionally, expansion projects at the Dahej terminal and constructing an FSRU at Gopalpur in Odisha are underway to meet growing demand.

Long-term Contracts and Future Plans:

The company aims to source more gas through long-term contracts, with an expected increase in gas imports, as India targets to increase the share of natural gas in its energy mix to 15% by 2030.

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