Gas Plan

July 31, 2013 (LBO) - Sri Lanka's state-run ports agency is planning a liquid natural gas terminal in its southern port in Hambantota for power generation and LNG bunkeringis also on the cards, in a strategic plan running up to 2020. SLPA chairman Priyath Wickrema said the strategic plan 'Vision2020' will enable Sri Lanka to be a logistics hub in the region and Hambantota will play a key role.

Cairn India has found gas deposits in its exploration block off the Mannar coast in northeast Sri Lanka and production is expected to commence around 2017 if the deposits are commercially viable.

The strategic plan said a dedicated LNG facility will be constructed in Hambantota.

"..[T]he vast space available in close proximity to the port is deal to station a power plant utilizing LNG.." the report said.

Head of Sri Lanka's oil exploration office, Saliya Wickramasuriya said in May, Sri Lankan power sector officials have been informed of the possibility of gas discovery and to put the brakes on coal.

Coal is cheaper than natural gas but Sri Lanka could potentially subsidize LNG below world market prices at a loss of export revenues to make the fuel cheaper, analysts say.

LNG is however much cleaner, than both coal

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