ECONOMYNEXT – The Asian Development Bank will fund a study on the feasibility of setting up a liquefied natural gas (LNG) terminal in Sri Lanka to supply the island’s own power plants and also ship fuel to the Maldives.
The project, approved in response to a request by Sri Lanka in March 2019, will include a feasibility study to identify the optimal LNG facility and site, and surveys and hydrodynamic studies and also assess CEB’s technical and procurement capacity for LNG.
“Maldives is considering importing LNG for power generation and other uses,” the ADB said.
“LNG terminal in Sri Lanka with sufficient storage and adequate supply will benefit from lowering the energy cost of both countries.”
The project will study the demand for natural gas in Sri Lanka, global LNG market, LNG pricing and contracts, possibility of supplying LNG to regional markets, and other social and environmental aspects.
The proposed feasibility study will identify whether a land-based LNG terminal or floating storage and regasification unit would be optimal for Sri Lanka and the most suitable location for new LNG-fired power plants and associated facilities.
The ADB aid, in the form of a grant, comes in response to a Sri Lankan government request to ADB in March 2019 to support Ceylon Electricity Board (CEB) urgently in exploring LNG as a fuel for power generation.
The Ministry of Power and Renewable Energy also sees a greater role for LNG in its goal of reducing the use of oil and coal in the country, particularly for power generation.
(COLOMBO, 12 June 2019)