"We have expressed interest for sourcing LNG from the project. Formal negotiations will soon start," Reuters quoted company finance director Amitava Sengupta as saying.

India, Asia's third-largest energy consumer, faces a natural gas supply crunch with booming demand for the clean fuel far outstripping domestic supplies.

ExxonMobil, Oil Search and other partners in the PNG LNG project are expected to make a decision to enter front-end engineering and design for the project before the end of the current quarter.

Petronet is also in talks to buy Exxon's share of 3.75MMtpa LNG from Australia's Gorgon project. It plans to bring Gorgon LNG through a new terminal at Kochi in the southern state of Kerala, which is expected to be commissioned in 2011.