Hambantota Energy Project launched in 2012 remains a non-starter
View(s):The Hambantota Energy Project (HEP) launched in 2012 remains a non-starter up to now due to the delay in taking firm policy decisions by government officials, an international energy developer alleged.
If government officials had made firm decisions, HEP would have been completed with the implementation of Liquefied Natural Gas (LNG) plants, Greenlink Global Consulting Inc said in a media release.
In 2010 Greenlink introduced a power and energy developer which is a subsidy of a renowned US blue chip asset management company to
Sri Lanka
In 2012 this energy developer entered into an exclusive MOU with Board of Investment of Sri Lanka (BOI) for the LNG facility, gas pipe line and 500MW-1000MW power plant project in Hambantota, The project cost was US$1.4 billion.
However in March 2013 the Ceylon Electricity Board (CEB) requested an independent study of the use of LNG as a fuel and hence the approval process was delayed, the company said.
Even after granting exclusive rights by the BOI for the development of the  energy project at Hambantota to this developer, another company received cabinet approval for the use of Hambantota land and a Letter of Intent for a development of a 1000 MW power project without conducting due diligence or a feasibility study.
This circumvention of rights of the developer and Greenlink was brought to the notice of the government in 2015, Greenlink said in its media release.
Government officials have recommended at that time to initiate a government-to-government deal for the HEP. Thereafter Greenlink approached the Canadian government in February 2016 and facilitated the entry of Crown Corporation of the government of Canada to take up the project.
This company has already expressed its interest in the project to Finance Minister Ravi Karunanayake and ministry secretary Dr. R.H.S. Samaratunga.
However it requires government’s positive action to make this project a reality clearing all the bottlenecks and irregularities, the media release said.
Sri Lanka’s ambitious goal of becoming a mega global hub in energy is at risk with this vital US$1.4 billion LNG project by an international energy project developer left in the wilderness with relevant authorities passing the buck.
| Chinese firm to handle LNG | |
| Considering the huge power needs for the development of industrial zones, heavy industries, tourism development needs and enhancing the potential of the Hambantota Port, the necessity of uninterrupted power supply was discussed and the Chinese Embassy in Colombo has nominated a Chinese company to carry out the LNG project, official sources said. With LNG prices coming down, the Ceylon Electricity Board (CEB) is considering building LNG power plants, but needs large units to justify the high cost of an unloading and re-gasification terminal, a senior CEB engineer said adding that no confirmation on the awarding of the contract has been made as yet. The government has taken a decision not to entertain unsolicited bids for LNG power plants. CEB will consider introducing LNG into local system in the next few years due to operational issues, he added. |