Daily Mirror (Sri Lanka)

Dullas opposes move to hand over Sri Lanka’s LNG supply monopoly to Us-based New Fortress Energy

„Says Cabinet of Ministers not yet aware of a definitive agreement with Fortress Energy „Govt. expected to provide a full update on matter to Parliament at next sitting


Expressing his opinion on the move by the government to give away exclusive LNG supply rights to Us-based New Fortress Energy (NFE), Co-cabinet Spokespers­on and Mass Media Minister Dullas Alahapperu­ma, who earlier served as the Power Minister, this week publicly opposed any moves leading to a monopoly in LNG supply to the country.

Moving ahead with an unsolicite­d proposal made by New Fortress, the government signed a Framework Agreement (FA) with the firm on July 7, 2021. The key features of the unsolicite­d proposal include the purchase of 40 percent shares of West Coast Power Private Limited (WCPL) for US $ 250 million, execution of the LNG terminal project, which includes a floating storage regasifica­tion unit (FSRU), a mooring system and a pipelines, as well as the supply of LNG to WCPL, Sobadhanav­i Limited (SBL) and other plants.

The Ceylon Electricit­y Board Engineers’ Union (CEBEU) last week charged that the proposal also includes giving away exclusive rights of supplying LNG to the country’s electricit­y generation to New Fortress, with commitment to purchase LNG from the firm under very strict conditions, which would be favourable to them, thereby, leading to a monopoly in LNG supply to the country.

Responding to a media query at the Cabinet press briefing on Tuesday, Alahapperu­ma stressed that he’s strictly against any moves to grant an LNG supply monopoly to New Fortress. “That’s why I decided to float a competitiv­e tender when I was the Power Minister,” he said.

Following an 18-month feasibilit­y study sponsored by the Asian Developmen­t Bank, the Ceylon Electricit­y Board (CEB) floated tenders in February this year to build the country’s required LNG infrastruc­ture, which included an FSRU to be built on a 10-year build-operate-own basis and pipelines on build-operate-transfer basis.

Meanwhile, New Fortress recently announced that it has entered a definitive agreement with Sri Lanka’s government. However, Alahapperu­ma said that the Cabinet of Ministers was not updated on the reported new agreement.

He assured that the government would provide a full update on the new developmen­ts on the matter in Parliament at its next sitting.

Further, the coalition parties in the government are also scheduled to hold internal discussion­s on the matter, with several junior parties opposing the move.

The CEBEU warned that the country could lose up to US $ 400 million over the next five-year period, if the government decides to move ahead with the unsolicite­d proposal.

 ?? Dullas Alahapperu­ma ??
Dullas Alahapperu­ma

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