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Thursday, 9 November 2017 00:00 - - {{hitsCtrl.values.hits}}
By Chathuri Dissanayake
The Government this week green-lighted the construction of a 400 MW Liquefied Natural Gas (LNG) power plant in Hambantota.
The plant is to be jointly operated as a Government-to-Government project, Power and Renewable Energy Minister Ranjith Siyambalapitiya told Cabinet. Accordingly, the Chinese Government has nominated China Machinery Engineering Corporation (CEMC) to be the implementing partner with the Ceylon Electricity Board from Sri Lanka where the shareholding will be held at a 70:30 ratio respectively.
The plant is a result of the investment and economic agreement between the two countries and was initially designed to supply power to industries established in the Hambantota area. However, the Minister informed Cabinet that the construction of the plant was put on hold until factories to procure power were established.
Following discussions within the Cabinet Committee on Economic Management, it was later decided to establish the LNG plant as an Independent Power Producer (IPP) at the beginning with plans to revisit the setup once factories were established in the area, the Minister said in his Cabinet proposal.
The approval comes as the country faces a looming power crisis with delays in implementing the long-term generation plan for power. The plant will be able to ensure an uninterrupted power supply to the factories to be established in the industrial zone in Hambantota, Siyambalapitiya told Cabinet
Further, a separate LNG terminal will also be built in the Hambantota area enabling the plant to operate on natural gas from its inception. According to proposals given by the CEMC, the plant will be completed in two years.
The plant will also be incorporated in the long-term energy plan approved by the Public Utilities Commission and implemented with relevant approval. Cabinet also gave approval to appoint a joint working committee comprising representatives from the Ministry of Commerce of China and CMEC on behalf of the Chinese Government while officials from the Power and Renewable Ministry, CEB, Ceylon Petroleum Cooperation and Sri Lanka Ports Authority will represent the Sri Lankan Government.
The joint venture to set up the LNG plant comes in the wake of the Sri Lankan Government’s decision to switch to LNG for electricity generation.
Further, in August Prime Minister Ranil Wickremesinghe announced that steps were being taken to set up two LNG plants in the country with the assistance of India and Japan. He said that the third LNG power plant was likely to see Chinese involvement while tenders had also been called for a fourth LNG plant. The Korean Government also submitted a separate proposal to establish an LNG plant in Sri Lanka.
