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300 MW LNG power plant: SL-India to form company 

09 Jan 2021

Following the resumption of long-delayed negotiations last week with the visiting Indian External Affairs Minister S. Jaishankar, the 300 MW liquefied natural gas (LNG) power plant is now back on track, as a joint company is to be formed between India and Sri Lanka towards commencing construction work, The Sunday Morning learnt.  Accordingly, the joint company would be formed between India's largest power utility, National Thermal Power Corporation Ltd. (NTPC) and Sri Lanka’s Ceylon Electricity Board (CEB).  Nevertheless, the Government has not yet announced the final decision on the handing over of the LNG power project to India which was proposed by the previous Government when cancelling the plans for a 500 MW Indian-built coal-fired power plant at its strategic eastern port city of Trincomalee in 2016.  However, Power Minister Dullas Alahapperuma said the Indian proposal was included into a recent cabinet proposal from the Ministry together with other proposals from Japan and Korea.  “The 300 MW LNG power plant project was an agreement between the Governments of Sri Lanka and India in 2016. This was proposed instead of the Sampur coal power project which was cancelled at the last moment in 2015,” he told The Sunday Morning When queried as to whether the Government would be going ahead with the proposal, he said that no decision has been taken in this regard by the Government yet.  "As a country, we have given a commitment to India, as by the time the Government decided to cancel the Sampur project, the power purchasing agreements between the two countries had also been signed,” Alahapperuma said, adding that therefore, there was a government pledge made to India on the 300 MW LNG power plant.   Meanwhile, a well-informed source attached to the Ministry of Power said that several rounds of discussions were held between the two parties under the previous Government, but that the new administration is yet to give its consent to the agreements reached between the two parties.  “India was keen on funding an LNG power plant of around 500 MW, but under the CEB’s Long-Term Energy Generation (Expansion) Plan, the system could accommodate only another 300 MW and therefore, several rounds of discussions were held,” the source said, adding that at present, the negotiations were at a standstill, as the CEB has decided to go for project tendering.  When contacted by The Sunday Morning, CEB Chairman Eng. Vijitha Herath said that the CEB was currently focusing on the tendering process and that the already approved power projects including the 300 MW LNG power plant had been handed over to the independent power producer Lakdhanavi.  However, unsolicited proposals, such as government-to-government ones, will be considered in the future if there is a request, he said.  Meanwhile, the CEB is to also call for tenders for the construction of the second LNG power plant in Kerawalapitiya next month. Herath said that along with the construction of the LNG power plant, the tender would also be called for the LNG supply next month. Furthermore, he said that the construction of the already tendered LNG power plant would commence next month. 

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