New York-based gas-to-power developer New Fortress Energy has signed a framework agreement with Sri Lanka’s government to construct a new offshore LNG receiving, storage and regasification terminal.
The LNG import terminal is to introduce LNG to Sri Lanka for the first time in order to push the country’s transition to cleaner energy sources.
Under the agreement, New Fortress will supply LNG to the existing 300 megawatts Yugadanavi power plant. NFE is negotiating the purchase of the government’s 40 per cent stake in the company that owns the power plant.
This power plant is currently under a long-term power purchase agreement (PPA) to provide electricity to the national grid that extends through 2035.
The terminal will be located off the coast of Colombo to supply gas to the country’s power plants, primarily located in the Kerawalapitiya power complex.
The Kerawalapitiya power complex consists of 300 megawatts today and is expected to grow to over 1,000 megawatts by 2025.
As part of the agreement, the government will facilitate New Fortress to obtain necessary permits to construct the LNG terminal.
The terminal is expected to begin operations by the second half of 2022.
Wes Edens , chairman and CEO of New Fortress Energy, said: “This investment in Sri Lanka’s first LNG terminal will advance the country’s clean energy transition and support sustainable development for this vibrant economy. This is the first of what we think will be a number of investments in power and infrastructure in the country.”