Lanka expects India, Japan, New Fortress to join in LNG deal: Minister

ECONOMYNEXTSri Lanka is expecting companies from Japan, India, Japan, and New Fortress Energy of the US to jointly come up with a proposal to supply a liquified natural gas terminal, Power and Energy Minister Kanchana Wijesekera said.Sri Lanka is building two LNG-capable 300MW-sized combined cycle power plants but has no terminal to unload the fuel.

Minister Wijesekera claimed that a combined cycle known as Yugadanavi was already capable of running on LNG. Another 300MW plant known as Sobadanavi would be available from November 2023.

“But the problem is the CEB unions and other went to court regarding the LNG supply. Without the supply and infrastructure,” Minister Wijesekera said.

“So, we will execute a plan fast in January for infrastructure and supply of LNG.”

The CEB had earlier floated a tender for a build-operate-own floating storage re-gasification unit (FSRU) which will be financed by throughput charges and LNG will be supplied separately by competitive tenders like coal and fuel is supplied now.However the tender was not proceeded through after a controversial unsolicited deal with US based New Fortress Energy was made public.

“The tender for the terminal had not been given,” Minister Wijesekera said. “Before that there are two proposals. In 2017 a tripartite agreement between India, Japan and Sri Lanka had been signed.

“In addition, there is another agreement with a company called New Fortress Energy. So we are looking to see what can be implemented most practically. Next steps will be taken accordingly.

“I think those companies are talking among themselves to operate jointly as far as I know.

“We will have to do this with all the companies after all those discussions are over.”

New Fortress and at least two other proposals had involved controversial take-or-pay energy deals involving compelling the CEB to buy LNG from the terminal owner or pay penalties had been opposed by unions.

“It is still at discussion level,” Minister Wijesekera said when asked whether another take-or-pay deal was in the offing.

“There is no firm decision yet. When there is a firm decision we will inform you.”

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