Sri Lanka to set up floating storage LNG trading facility at Hambantota Port
Sri Lanka to set up floating storage LNG trading facility at Hambantota Port

Sri Lanka to set up floating storage LNG trading facility at Hambantota Port

Sri Lanka is to launch ‘Hambantota LNG Hub’ – a floating storage LNG trading facility at the country’s southern Port of Hambantota – through the signing of the relevant agreement with Pearl Energy (Pvt) Ltd. and the Board of Investment of Sri Lanka.

The latest initiative will bring LNG to the doorstep of Sri Lanka with a primary aim of trading LNG in the region utilizing the strategic location of Hambantota.

The LNG Hub will become a landmark infrastructure development for the region paving the way to broader access to natural gas as a primary fuel in South Asia and by commencing commercial operations within six months, Pearl Energy will utilize a floating storage unit (FSU) with an initial capacity of 1 million tonnes per annum (MTPA), a news report in the state owned Daily News noted.

The company will deploy small LNG Carriers to re-distribute LNG to South India and the Maldives providing LNG as a clean and affordable alternative to the industries in these locations, the report also stated.

“It is our pleasure to embark on this journey of bringing clean energy to the doorstep of Sri Lanka and the region. Taking the ‘early mover’ Advantage we will strive to place Sri Lanka as a future LNG Hub of the world. Factors including the strategic location of Hambantota, newly established stable government and its investor friendly policies as well as the fast growing regional demand for LNG Encouraged our investors led by Omar Siraj of Saudi Arabia to place their confidence on this project despite the global economic downturn caused by Covid-19 pandemic,” Tania Siegertsz, Director, Pearl Energy has been quoted as saying.

“Sri Lanka is extremely well equipped to meet the change in dynamics in the global LNG market and consolidate its position as a key player for the future. Though our project is launched targeting regional trade, the fact that a world class LNG hub will soon be within the Port of Hambantota, we are confident that Sri Lanka too will be encouraged to convert its power plants to LNG Thus saving millions of USD whilst also increasing the efficiency and producing more power to the national grid.

“The Port too could also commence using LNG for bunkering thereby making Hambantota Port and its industrial Zone as a ‘Clean Energy Zone’ of the future,” Siegertsz has added.

OSL take:

The above mentioned project will open up a multitude of business/investment opportunities in Sri Lanka. The island’s geographical positioning in the Indian Ocean has placed much importance in Sri Lanka’s maritime, trade and investment sectors. Given the magnitude of investments flowing in to the country, other foreign businesses/investors could also explore opportunities rising in the country. 

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Article Code : VBS/AT/31082020/Z_8

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