May 06, 2016 (LBO) – Sri Lanka wants more power generation from Liquefied Natural Gas (LNG), because natural gas is attractively priced in international markets, and will rely less on coal, a government official said.
“It is a very compelling case to start gasifying Sri Lanka using, initially, imported LNG, and then at some point in the future, when it’s technically available, phasing into domestic gas,” Saliya Wickramasuriya, director general of the Petroleum Resources Development Secretariat, told Lanka Business Online.
“As a country our political leadership is strongly supporting conversion to gas at this point,” he said.
Sri Lanka had a 500MW coal-fired power plant in Sampur in the pipeline, a joint venture between the Ceylon Electricity Board and National Thermal Power Corporation (NTPC) of India.
But industry analysts pointed out that natural gas is currently the superior option which is also more environmentally friendly. Wickramasuriya said the government has reached the same conclusion. Now the task was to build infrastructure that supports power stations utilizing LNG.
With possible natural gas located off Sri Lanka’s West coast, natural gas exploration and pricing would be tied to an overall plan utilizing more LNG in the island’s energy mix, he said. LNG offers a bridging solution for medium-term power generation plans.
“The current external environment is right to start creating domestic demand. Two years ago our justification for switching to gas was long term economic value over today’s price. But now even short term pain is not necessary,” he said.
“The landed cost of gas via LNG import has become very competitive today, even including re-gas facility cost. This is not something we could have said two years ago.”
In terms of domestic demand, a 300 MW oil fired power plant, the Yugadanavi Power Station in Kerawalapitiya, can be converted into an LNG-fired power station without much difficulty, according to its owners, he said. The Sampur power plant too can be shifted further inland reducing its environmental impact, he added, emphasizing that portability is an additional benefit to environmental footprint.
In recent years environmentalists have raised concerns about the pollution aspects of coal power, and pointed out that many countries have switched away from coal towards LNG and renewable sources of power such as wind and solar.
In the case of Sri Lanka, coal powered plants on either side of the island would ensure constant particulate fallout in the centre of the island year-round in either monsoon, he said.