Two LNG power projects get underway
View(s):The groundwork towards commencing two LNG (Liquefied Natural Gas) power plants involving an American and a local company has been laid by the government weeks before highlighting it in budget 2021, official sources said.
Budget 2021 revealed that two LNG plants are to be added to the national power grid while a new plant will also come up at Kerawalapitiya.
US-based M/s New Fortress Energy has been given the green-light to supply LNG power with the cabinet of ministers okaying it by considering the proposal by US Ambassador Alaina B. Teplitz subject to the normal procurement process.
According to this proposal, the US company has expressed interest to supply electricity to the national grid under a power purchase agreement with Ceylon Electricity Board (CEB) for five years at the rate of around Rs. 18 per LNG power unit.
This is cheaper compared to the price of Rs. 30 per diesel power unit at present and it has been decided to call for a comprehensive technical and commercial report from the US company.
The proposal will be approved following normal tender procedures calling for expression of interest from suitable companies/investors, a senior official of the Ministry of Power said adding that all proposals will be evaluated by a Cabinet Approved Negotiating Committee (CANC).
In the meantime, Sri Lanka’s first ever 300MW LNG power plant will commence its construction work. This contract has been awarded to Lanka Transformers Ltd (LTL-Lakdhanavi), in which a majority stake is owned by the Ceylon Electricity Board (CEB).
Construction work will commence at the Lakdhanavi Power Plant premises in Kerawalapitiya, where there is currently a diesel power plant.
In the new project Lakdhanavi will be partnered with a foreign investor, which will contribute 30 per cent of the project cost. (BS)