Hambantota LNG plant gets Cabinet nod

Thursday, 4 October 2018 01:23 - - {{hitsCtrl.values.hits}}

Cabinet this week granted approval to sign a memorandum of understanding (MOU) between China Machinery Engineering Corporation (CMEC) and Ceylon Electricity Board (CEB) to set up the much-awaited 400MW liquefied natural gas (LNG) plant in Hambantota, with an equity ratio of 70/30.

Power and Renewable Energy Minister Ranjith Siyambalapitiya also obtained Cabinet approval to work with Hambantota Power Ltd. (HPPL), a fully owned subsidiary of CMEC which has been nominated by the Chinese Embassy as the joint venture partner for the LNG project.

The project will be implemented on a government to government basis, as part of Sri Lanka’s plan to set up three LNG plants with the help of China, Japan and India.

However, the MOU is to be signed by CEB and CMEC, as per discussion held with all stakeholders including the National Agency for Public Private Partnership (NAPPP).

The participation of Hambantota Power will only be taken following discussion between CEB and CMEC, the Minister told Cabinet.

Further, the Chinese Government has agreed to supply power from the plant at a lower price than the prices tendered for the recently approved 300MW LNG power plant, Siyambalapitiya said. However, the Minister informed Cabinet that it is not clear which principle – least cost or otherwise – is applicable for power plants implemented under government to government basis.