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Agreement signed to launch a floating storage LNG facility in Sri Lanka

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The Board of Investment of Sri Lanka has signed the agreement with Pearl Energy (Pvt) Ltd, to launch ‘Hambantota LNG Hub’ – a floating storage LNG trading facility at the Port of Hambantota, bringing LNG to the doorstep of Sri Lanka, with a primary aim of trading LNG in the region utilising the strategic location of Hambantota.

The agreement was signed by Mr Susantha Ratnayake, Chairman BOI and Ms. Tania Siegertsz – Director, Pearl Energy. The total investment of the project is US$97.2 million. The LNG hub will become a landmark infrastructure development for the region, paving the way to broader access to natural gas as a primary fuel in South Asia. Commencing commercial operations within six months, Pearl Energy will utilise a floating storage unit (FSU) with an initial capacity of 1 million tpy. The company will deploy small LNG carriers to redistribute LNG to South India and the Maldives, providing LNG as a clean and affordable alternative to the industries in these locations.

“It is our pleasure to embark on this journey of bringing clean energy to the doorstep of Sri Lanka and the region. Taking the ‘early mover’ advantage we will strive to place Sri Lanka as a future LNG hub of the world. Factors including the strategic location of Hambantota, a newly established stable government and its investor friendly policies, and the fast-growing regional demand for LNG, have encouraged our investors – led by Mr. Omar Siraj of Saudi Arabia – to place their confidence in this project despite the global economic downturn caused by Covid-19 pandemic’, said Ms. Tania Siegertsz – Director, Pearl Energy.

“Sri Lanka is extremely well equipped to meet the change in dynamics in the global LNG market and consolidate its position as a key player for the future. Though our project is launched targeting regional trade, the fact that a world-class LNG hub will soon be within the Port of Hambantota, we are confident that Sri Lanka too will be encouraged to convert its power plants to LNG, thus saving millions of dollars whilst also increasing the efficiency and producing more power to the national grid. The Port too could also commence using LNG for bunkering thereby making Hambantota Port and its industrial Zone as a ‘Clean Energy Zone’ of the future,” Ms. Tania stated further.

Hambantota Port has the geographic advantage of being strategically located nearest to the world’s busiest shipping lane with the added benefit of a deepwater coastline. This allows the port to be capable of handling the world’s largest container ships and super tankers, making this port an ideal location for the transshipment of goods and natural resources moving across the subcontinent. Hambantota is also integrated into the global development strategy of the Chinese government, the Belt and Road Initiative (BRI), providing the opportunity for wider regional maritime connectivity.

Moreover, this port has the benefit of the vast expanse of land available in the Hambantota District for its expansion and has the potential to emerge as the most favoured international business hub, with the aim of creating an energy hub surrounding the port of Hambantota.

Read the article online at: https://www.lngindustry.com/liquid-natural-gas/25082020/agreement-signed-to-launch-a-floating-storage-lng-facility-in-sri-lanka/

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