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Sri Lanka PM, President behind LNG 'hedging style' deals: legislator

Apr 01, 2019 09:13 AM GMT+0530 | 0 Comment(s)

  

ECONOMYNEXT - Parties promoted by Sri Lanka's Prime Minister Ranil Wickremesinghe and President Maithripala Sirisena are behind two controversial plants that seek to outsource liquefied natural gas procurement for 20 years, a legislator charged.

"The Japan, India, Sri Lanka deal is on the intervention on the Prime Minister and the Korea, Sri Lanka deal is on the intervention of the President," Nalinda Jayatissa, a member of Janatha Vimukthi Peramuna, an opposition party told parliament.

The current administration has proposed to set up a LNG terminals on a 'take-or-pay' deal which has come under fire by power engineers and other analysts.

The cost of the terminals will be financed by annual payments where state-run Ceylon Electricity Board is forced to buy gas whether they want it or not, at prices which are not yet in the public domain.

"These will be like the 'hedging deal," Jayatissa said, referring to a complex options contract, which went against state-run Ceylon Petroleum Corporation as it was compelled to buy large volumes of oil at above market prices.

"The Japanese plant will commit Sri Lanka to buy 1 million tonnes of LNG for 20 years whether we want it or not.

"The Korean plant will commit Sri Lanka to buy 0.6 million tonnes of LNG for 20 years.

"Before entering these contracts, we have to see what the benefit the country will get. Neither Japan nor Korea produces LNG."

Sri Lanka President Maithripala Sirisena suddenly cancelled a 500MW coal plant on which ground work had been done for over 10 years, just before the plant was expected to go for international tender.

Sri Lanka is now facing a power crisis due to the cancellation and the country is now under power rationing because the award of a stop gap 300MW combined cycle plant was also delayed amid alleged corruption. 

Jayatissa said Sri Lanka was entering power crisis and then emergency power is being bought.

"All this is being done for commission kutti," he claimed. (Colombo/Apr01/2019)

 


 

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