Feb 28, 2018 (LBO) – Sri Lanka’s cabinet on Tuesday approved a proposal to conduct a feasibility study for the proposed Liquefied Natural Gas (LNG) Terminal and the Floating Storage Regasification Unit (FSRU).
Accordingly, Sri Lanka will sign a tripartite MoU with India and Japan soon to conduct a feasibility study.
Cabinet has also decided to authorize Sri Lanka Gas Terminal Limited to enter into agreements with the Indian and Japanese parties to establish the proposed partnership.
A cabinet decision said a MoU was signed between Sri Lanka, India and Japan for the establishment of a natural gas terminal in Kerawalapitiya, a floating natural gas terminal and the establishment of a distribution infrastructure.
Sri Lanka Gas Terminal Limited will have 15 percent stake in this joint venture while 47.5 percent of the stake will be with the India’s Petronet LNG limited.
Japan’s Sojitz Corporation and Mitsubishi will jointly have a 37.5 percent shareholding of the venture.
Japanese Foreign Minister Taro Kono’s visit to Sri Lanka last month confirmed Sri Lanka’s first Liquefied Natural Gas project.
Reports said the LNG terminal is to be located within Colombo port and pipelines from the port will transport the gas to two dual-fuel power plants in Kerawalapitiya expected to be completed around 2021.
Experts say recent interest shown by Japan and India in investing in Colombo and Trincomalee ports, is related to concerns arising from Sri Lanka’s lease of Hambantota port to a Chinese company that holds a majority stake.