Sri Lanka to call international bids for gas exploration in October: Minister

Jun 09, 2015 (LBO) – Power and Energy Minister says a fresh round of international tenders will be called in October 2015 in order to expedite the gas resources exploration process in the Mannar basin.

“In October we will call for international tenders to explore the gas deposits in the country,” Power and Energy Minister Champika Ranawaka, said while addressing a gathering in Colombo, Monday.

Earlier this year Cairn India announced its withdrawal from Mannar Basin natural gas exploration following the global petroleum price slump.

Currently thermal generation that uses diesel, heavy oil, naptha and coal accounts for 70 percent of the Island’s energy supply and hydro accounts for 30 percent including other renewable sources.

The Ministry of Power and Energy is keen on commercializing the natural gas deposits found by Cairn and have included it in the new 10-year national energy plan.

“We have plans to convert our power plants, owned by the Ceylon Electricity Board that use diesel for power generation into gas in the future,”

“We expect to make a massive investment in this regard and are in the process of implementing the laws required to form a National Oil Company.”

Analysts say the whole thrust of future energy management should be to reduce the dependence on thermal generation, which not only absorbs valuable foreign exchange, involving very high opportunity costs, but also results in high unit costs.

One way of doing this would be to maximize the benefits of the discovery of commercial quantities of natural gas in the Mannar basin.