Govt. green-lights tripartite JV for Kerawalapitiya LNG plant

• India’s Petronet, Japan’s Sojitz Corporation and Mitsubishi, and Sri Lanka Gas Terminal Company Limited to sign MOU feasibility study to begin soon

 Government this week gave approval to sign a Memorandum of Understanding with companies representing India and Japan to build a Liquid Natural Gas (LNG) terminal and floating natural gas terminal in Kerawalapitiya, Cabinet Co-spokesman Minister Gayantha Karunathilaka said yesterday.

The Indian Government has nominated Petronet LNG Ltd. as their partner while Japan nominated Sojitz Corporation and Mitsubishi as their partner. The Cabinet Committee on Economic Management has approved Sri Lanka Gas Terminal Company Limited to represented Sri Lanka.

The proposal was put forward by Development Strategies and International Trade Minister Malik Samarawickrama, and Ports and Shipping Minister Mahinda Samarasinghe.

Under the MOU to be signed, the JV will carry out the initial feasibility study first, Karunathilaka said. Once the study is completed and the project is deemed viable, the Ministers propose a shareholding structure where Sri Lanka Government will hold 15%, Indian representative Petronet will hold 47.5% and Japan’s Sojitz Corporation and Mitsubishi will control the remaining 37.5%.

However, the Sri Lanka Ports Authority has raised concerns over the safety of the harbour and ships docking at New South Harbour, due to the presence of the proposed site of LNG terminal. To study the issue, the SLPA is taking steps to commission an independent consultant to examine and assess the proposed project, and advise on measures to be taken to mitigate any safety concerns. According to the Cabinet proposal put forward, all three partners in the JV has agreed to determine the location of the facility based on the recommendations of the consultant commissioned by the SLPA.