A comprehensive feasibility study to establish a Liquefied Natural Gas (LNG) terminal and Floating Natural Gas terminal within the Colombo South Harbour will commence this month, Sri Lanka Ports Authority (SLPA) Chairman Dr. Parakrama Dissanayake said.

Speaking to the Daily News yesterday, the SLPA Chairman said the feasibility study will look at not only the financial viability but also the environmental and safety issues of the project.

He said a trilateral Memorandum of Understanding (MoU) between Sri Lanka, Japan and India on a LNG terminal and Floating Storage Regasification Unit (FSRU) will be inked next week and the feasibility study will commence shortly after that.

Dissanayake said the LNG terminal will be located at the end of the Colombo South Container Terminal.

“The feasibility study will be carried out by independent third party analyzers and special attention will be paid to safety issues as it is going to be inside a harbour. An underground pipeline will have to be laid to pump the gas from the Western container terminal to a facility in Sapugaskanda or Kerawalapitiya, but it is still premature to comment,” he said.

The project to build the LNG terminal and FSRU will be a joint venture by Sri Lanka Ports Authority with Japan and India.

According to the joint Cabinet Paper presented by Development Strategies and International Trade Minister Malik Samarawickrama and Ports and Shipping Minister Mahinda Samarasinghe, the Sri Lanka Government (Sri Lanka Gas Terminal LTD) will have 15 percent stake  in the joint venture, while Petronet LNG Ltd of India will hold 47.5 percent stake and Sojits Corporation and Mitsubishi Company of Japan will hold 37.5 percent shareholding. Cabinet approved it on Tuesday.

LNG is relatively a new energy source to Sri Lanka and this will be the country’s first LNG project. LNG is natural gas that has been converted to liquid form for ease and safety of storage or transport.

According to Government sources,the LNG terminal, which will import super-cooled natural gas in ships, will take about three years to complete.

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