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India, Japan to build LNG terminal, 500MW power plant in Sri Lanka

ECONOMYNEXT – India and Japan will build a floating liquefied natural gas (LNG) terminal, a 500 MegaWatt power plant and a gas distribution pipeline in Sri Lanka, a media report said.

Sri Lanka will issue the Government of India a letter of intent by end May to a build an LNG floating regasification and storage unit in Kerawalapitiya, The Sunday Times newspaper said, citing a memorandum of understanding signed between the two countries this week.

India will also be issued a letter of intent for a 500MW LNG fired power plant by end May.

A compressed LNG retail distribution pipeline network

A joint venture between India, Japan and Sri Lanka will be formed to build the infrastructure.

A Sri Lanka, India and Japan joint venture is to be formed by end July 2017 to carry out the project.

Sri Lanka cancelled a 500MW coal fired power plant to be built by India in Trincomalee in favour of more expensive (but cleaner) LNG, just before construction was due to begin.

Critics alleged corruption in the deal and a desire to award a thermal plant to a favoured party quickly.

Sector analysts also pointed out that the most suitable location for an LNG plant was Kerawalapitiya, near Colombo, where a terminal could be used for powering other users in the Western province and also modifying existing diesel plants to run on natural gas.

Japan had been involved in planning LNG facilities in Colombo for several years and had already helped state-run Ceylon Electricity Board conduct feasibility studies. (Colombo/Apr30/2017)





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