SL to get first LNG terminal with New Fortress Energy deal

Sri Lanka has entered into a framework agreement with New Fortress Energy (NFE), a US-based entity to build the country’s first Liquefied Natural Gas (LNG) terminal.

The freshly inked agreement will pave way for the construction of a new offshore LNG receiving, storage and regasification facility.

The project, located off the coast of Colombo, will supply gas to the country’s power plants, primarily located in the Kerawalapitiya Power Complex.

In a statement to the media, NFE shared that the terminal will supply natural gas to the 300-megawatt (MW) Yugadanavi Power Plant. It added that negotiations are underway with regard to the purchase of government’s 40 percent stake in the company that owns the power plant.

According to NES Chairman and CEO Wes Edens, the investment will advance Sri Lanka’s clean energy transition and support sustainable development for the economy.

“This is the first of what we think will be a number of investments in power and infrastructure in the country,” he said.

A per the agreement, the government will facilitate the obtainment of permits and entitlements for NFE to kick off construction of the terminal that is expected to begin operations by 2022 second half.

While the preliminary stages of the project are being rolled out, the commercial agreements relating to the purchase of government’s interest in the company owning the power plant are to be finalised and is subject to final documentation.