ECONOMYNEXT – Sri Lanka will set up a natural gas company as a subsidiary of the state-run Ceylon Petroleum Corporation which is expected to develop natural gas reserves, construct pipelines, and transport and distribute the fuel, a government statement said.
The move comes shortly after Finance Minister Basil Rajapaksa said 300 odd state entities are not giving adequate returns and are eating tax money for current operations.
Cabinet approval has been given to set it up as a ‘public private partnership’ the statement said without giving details.
Under the National Policy on Sri Lankan Natural Gas, the government will establish a national natural gas company under a public-private partnership to store, construct pipelines, transport and distribution, develop facilities and monitor local natural gas exploration and production, the statement said.
The Cabinet said this will enable local oil exploration and production with commercial capability.
The CPC had already tendered for a BOT LNG pipeline to take fuel from a floating regasification terminal to a power complex.
Energy Minister Udaya Gammanpila said earlier this week that Sri Lanka will auction an oil exploration block off Mannar where the presence of some gas reserves have already been identified.
Sri Lanka is also planning on auctioning an oil block found in the Mannar basin.
Cairn Lanka, a unit of Cairn India found the presence of natural gas in two exploration wells labelled Dorado and Barracuda, but did not declare a commercial discovery to develop.
The Dorado-91H/1z well was drilled to 4741 metres and had found 24 metres of hydrocarbon-bearing Cretaceous sandstone in three zones between the depths of 4067 metres and 4206 metres. They were said to be gas bearing with some liquid hydrocarbon potential.
“Manufacturing fossil fuel or Petroleum and natural gas reduces the dependency on fossil fuel or Petroleum import for local consumption as well as it may create
the opportunity to become an exporter of natural gases in the future and earn foreign exchange thereby,” a cabinet paper said.
The company is proposed to be established as a subsidiary company of Lanka Petroleum Corporation.
Barracuda-1G/1 was drilled to a depth of 4741 metres and had fond 24 metres of hydrocarbon-bearing Cretaceous sandstone in three zones between the depths of 4067 metres and 4206 metres.
The reservoirs are mostly gas-bearing with some additional liquid hydrocarbon potential. (Colombo/Nov24/2021)