Sri Lanka hopes for LNG power plant with India in Sampur

ECONOMYNEXT – Sri Lanka hopes to begin talks with India on building a liquefied natural gas plant in Trincomalee in place of a cancelled coal power station, Secretary of the Power and Energy Ministry Suren Batagoda said.

Sri Lanka announced that it would not go ahead with a 500 MegaWatt coal power plant in Sampur, Trincomalee which was to have been a 50/50 joint venture with state-run Ceylon Electricity Board and India’s National Thermal Power Co-operation citing environmental concerns.

Sri Lanka hopes to begin talks on an LNG power station when India’s power ministry secretary visits Sri Lanka as part of a joint working committee, Batagoda said. Decision on the Trinco plant has to be taken by the joint working committee.

Batagoda said CEB could still build a LNG plant with India’s NTPC and a third firm with LNG expertise joining in.

The plant can be built by 2020, he said.

Sri Lanka is expected to call tenders to build a 300MW dual fuel combined cycle plant shortly to avert a power crisis coming in 2018 from a delay and cancellation of the Trinco coal plant.

Reports have mentioned India’s Petronet LNG, as a possible third member of a joint venture power plant to replace the Sampur coal plant.

Petronet LNG is a firm backed by Gas Authority of India, Oil and Natural Gas Corporation, Indian Oil Corporation and Barat Petroleum Corporation Limited.

Coal is the cheapest thermal power source and LNG is more expensive. LNG prices are now unusually low. LNG however is cleaner than oil.

LNG’s higher cost is partly due to the need for a gas terminal.  (Colombo/Sept15/2016)