Sri Lanka’s CPC to seek international expertise to finalize policy paper on the use of LNG for power generation - Opportunity Sri Lanka

Sri Lanka’s CPC to seek international expertise to finalize policy paper on the use of LNG for power generation

Chairman of the Ceylon Petroleum Corporation (CPC), Dhammika Ranatunga has reportedly said the Company is seeking international expertise to carry out the necessary improvements on the policy paper compiled with local expertise for liquefied natural gas (LNG).
“We have now developed a basic policy paper on LNG with expertise from various local universities, our staff and Ceylon Petroleum Storage Terminals Ltd. (CPSTL) staff. We are now seeking international expertise to incorporate their viewpoint and necessary improvements,” Ranatunga has told the Daily FT.
Facing a looming energy shortage in the country, the government last year decided to adopt a policy to use LNG for electricity generation with plans to convert existing plants as well.
The CPC Chairman has told the media that it was critical to have a policy direction and feasibility study conducted in the sector going forward, as the Government has now shifted its focus to sustainable energy sources.
The Cabinet Subcommittee appointed to make recommendations on the Sri Lankan government’s policy on the usage of LNG in electricity generation and the construction of required infrastructure has reportedly advised the government last year that while striving to meet the increasing demand in the country, LNG should be used for power generation in the future.
In line with the recommendations, the government is to set up a Floating Re-gasification Storage Unit (FRSU) in order to receive and re-gasify LNG before 2019 to support the move to switch to LNG.
According to the media report, the committee has recommended a floating unit due to the relatively low costs involved in setting it up, compared to building a land-based gas-receiving terminal and the time consumed.
“Although we wanted to shift to LNG, in the initial stage we did not have a policy paper or a feasibility study. Only then was it passed on to the joint working committee and now we have the policy paper ready. We are also in the process of conducting a feasibility study on LNG,” Ranatunga has added.
The government is currently negotiating with India and Japan on their proposals to build two LNG plants separately with a generation capacity of 500 MW each.
According to reports, the Cabinet Subcommittee last year recommended technical conversions to be carried out at the Yugadanavi Power Plant in Kerawalapitiya, generating 300 MW and the two power plants situated in the Kelanitissa Complex, generating 163 MW each, to be operated by LNG.
In addition, two more plants to be set up during the next year, which would add another 1,000 MW to the grid, are to be operated by LNG.

OSL take:

The Sri Lankan government’s move to push for LNG based power generation will expand investment opportunities in the country’s power and energy sector. The interest to set up a Floating Re-gasification Storage Unit along with the technical conversions at the Yugadanavi Power Plant in Kerawalapitiya, generating 300 MW and the two power plants situated in the Kelanitissa Complex, generating 163 MW each, to be operated by LNG as well as two more plants to be set up during the next year, which would add another 1,000 MW are large scale investment opportunities for foreign businesses/investors.

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Article Code : VBS/AT/20180328/Z_7

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