State-run Petronet, India’s largest importer of LNG is seeking a loan from local banks of at least INR120bn ($1.4bn) in order to build an LNG terminal and petrochemical plant, Bloomberg reported on July 25 citing people familiar with the subject.

The company set up by the Indian government to import LNG and build LNG terminals across the country has been in talks with domestic lenders Axis Bank, Union Bank of India, and State Bank of India.

As it seeks financing, Petronet is accepting bids from lenders both in groups or individually and has appointed SBI Capital Markets to serve as adviser for any deals.

The loan is expected to have a repayment period of more than 10 years. Meanwhile, the pricing is expected to be lower than SBI’s one-month marginal cost of funds-based lend rate of 7.95%.

The loan facility for Petronet comes at a time of diminished activity among Indian lenders.

However, if Petronet completes the loan facility, it would be one of the country’s largest local currency loans for the year.

State-owned Petronet is attempting to raise funds to cover the construction of a 5mn tonnes per year (tpy) land-based LNG import terminal in Gopalpur in the state of Odisha on India’s east coast.

The company is also looking to build a new petrochemical plant in Dahej, on the southwest coast of India in the state of Gujarat. Petronet built India’s first LNG import terminal in Dahej in 2004.

The construction of a petrochemical complex would help Petronet branch out to beyond the LNG industry. The facility is expected to come with a price tag of INR207bn ($2.4bn).

Petronet reported its highest-ever profit after tax of INR39.26bn ($460mn) for the financial year ended March 31, 2025. The figure marks an 11% rise from INR35.36bn ($410mn) a year earlier.

India imported 36.3bn cubic metres of LNG for the fiscal year ending in March 2025, up from 31.8bn cubic metres one year earlier.