Sri Lanka power engineers in bid to block back-door LNG plants entry

ECONOMYNEXT – Engineers of Sri Lanka’s state-run Ceylon Electricity Board have warned that they are withdrawing from procurement committee in a bid to block attempts to bring liquefied natural gas plants after scuttling cheap coal plants on which years of work has already been done.

Sri Lanka’s politicians and a powerful committee of officials have indicated that coal plants would be stopped and LNG would be substituted instead, without going through any evidenced based policy formulation.

There were also statements that a coal plant in Trincomalee, which is about to start tendering has also been ‘cancelled’ in favour LNG.

The ad hoc decisions are also against existing policy and power sector laws and would be ‘illegal’ the CEB Engineers Union warned in a letter to Power and Energy Minister Ranjith Siyambalapitiya.

The Union demanded that any decision on cancelling coal plants after "a thorough study of the repercussions is carried out by a team of internationally recognized experts" to which the union would be given a chance to present information.

Engineers said they were aware of a plan to build a 300 MegaWatt combined cycle plant in Kerawalapitiya, but without an LNG terminal being built before hand, it would end up being operated on diesel.

Combined cycle plants can be adapted to burn ether LNG or liquid fuel.

Separately engineers also pointed out to Prime Minister Ranil Wickremesinghe that any LNG terminal should be built in Kerawalapitiya, which is near a large population centre where combined cycles already existed and multiple uses could be made, and not in Trincomalee.

The CEB union which is also against private enterprise demanded that the planned LNG terminal should be state-run.

The union said if the demands are not met, it will not take part in technical evaluation committees, effectively buckling procurement process.

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LNG is cleaner than coal and prices have fallen sharply over the past few years after ‘fracking’ – which critics say is environmentally unfriendly – improved supply.

It is however not clear whether current LNG prices will be maintained, especially if the US Federal Reserve fires another commodity bubble. (Colombo/July10/2016)
 

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