fbpx 53193-001: Supporting Feasibility Study and Survey to Adopt Liquefied Natural Gas (LNG) Power Generation to Diversify Energy Mix | Asian Development Bank

Sri Lanka: Supporting Feasibility Study and Survey to Adopt Liquefied Natural Gas (LNG) Power Generation to Diversify Energy Mix

Sovereign (Public) Project | 53193-001 Status: Active

The proposed feasibility study is to identify the optimal LNG facility for Sri Lanka (i.e., land-based LNG terminal or floating storage and regasification unit) and the most suitable location for the development of new LNG-fired power plants and its associated facilities. This will include detailed study by considering the demand for natural gas in Sri Lanka, global LNG market, LNG pricing and contracts, possibility of supplying LNG to regional markets, and other social and environmental aspects. Maldives is considering importing LNG for power generation and other uses. LNG terminal in Sri Lanka with sufficient storage and adequate supply will benefit from lowering the energy cost of both countries.

Project Details

Project Officer
Kolantharaj, Jaimes South Asia Department Request for information
Country
  • Sri Lanka
Sector
  • Energy
 
Project Name Supporting Feasibility Study and Survey to Adopt Liquefied Natural Gas (LNG) Power Generation to Diversify Energy Mix
Project Number 53193-001
Country Sri Lanka
Project Status Active
Project Type / Modality of Assistance Technical Assistance
Source of Funding / Amount
TA 9741-SRI: Supporting Feasibility Study and Survey to Adopt Liquefied Natural Gas (LNG) Power Generation to Diversify Energy Mix
Technical Assistance Special Fund US$ 225,000.00
Strategic Agendas Environmentally sustainable growth
Inclusive economic growth
Regional integration
Drivers of Change Governance and capacity development
Sector / Subsector

Energy / Energy sector development and institutional reform

Gender Equity and Mainstreaming No gender elements
Description

The proposed feasibility study is to identify the optimal LNG facility for Sri Lanka (i.e., land-based LNG terminal or floating storage and regasification unit) and the most suitable location for the development of new LNG-fired power plants and its associated facilities. This will include detailed study by considering the demand for natural gas in Sri Lanka, global LNG market, LNG pricing and contracts, possibility of supplying LNG to regional markets, and other social and environmental aspects. Maldives is considering importing LNG for power generation and other uses. LNG terminal in Sri Lanka with sufficient storage and adequate supply will benefit from lowering the energy cost of both countries. The site selection requires offshore survey and hydrodynamic studies to ascertain technical parameters required for LNG power generation infrastructure and its associated facilities, therefore it is recommended to engage a firm with expertise, equipment, and experience working in Sri Lankan ocean waters to carry out this marine survey assignment.

The TA will help provide necessary support for the feasibility study including marine survey for developing LNG based power generation and its value chain. CEB, a state-owned electricity utility, has already carried out a preliminary feasibility study with support from ADB exploring the possibility of LNG for Colombo-based power plants. The findings of the pre-feasibility study recommend the necessity to set-up an LNG terminal and other infrastructure on an expeditious basis for supplying LNG for power generation.

Project Rationale and Linkage to Country/Regional Strategy

The Government of Sri Lanka, through the External Resources Department (ERD), has requested ADB via letter dated 11 March 2019 to support Ceylon Electricity Board (CEB) urgently in exploring LNG as a fuel for power generation. The Ministry of Power and Renewable Energy (MPRE) also sees a greater role for LNG in its goal of reducing the use of oil and coal in the country, particularly for power generation. This is also in line with the government's key development priority to diversify the existing generation mix to include cleaner energy resources and climate change mitigation actions. A small-scale TA was preferred to initiate the necessary activities for LNG study quickly as requested by the government.

CEB currently does not have in-house capacity to undertake these tasks since LNG is entirely new to Sri Lanka. The TA will provide external consultants to assist in preparing the feasibility and survey report for LNG import, LNG terminal and sea side facilities, infrastructure and other allied facilities for LNG transmission to the prospective power plants.

Impact Inclusion of cleaner energy resources and climate change mitigation actions in Sri Lanka government's priority to diversify the power generation mix achieved
Project Outcome
Description of Outcome Increased viable options to diversify primary energy sources in power generation of Sri Lanka.
Progress Toward Outcome
Implementation Progress
Description of Project Outputs

Feasibility study to identify optimal LNG facility and site completed

Site survey and hydrodynamic studies to confirm feasibility study for LNG infrastructure completed

Assessment of CEB's technical and procurement capacity for implementing LNG infrastructure and its associated facilities conducted

Status of Implementation Progress (Outputs, Activities, and Issues)
Geographical Location Nation-wide
Summary of Environmental and Social Aspects
Environmental Aspects
Involuntary Resettlement
Indigenous Peoples
Stakeholder Communication, Participation, and Consultation
During Project Design
During Project Implementation
Business Opportunities
Consulting Services yes
Procurement Not required
Responsible ADB Officer Kolantharaj, Jaimes
Responsible ADB Department South Asia Department
Responsible ADB Division Energy Division, SARD
Executing Agencies
Ceylon Electricity Board
3rd Floor, G.O.B.A. Bldg.
#50,Sir Chittampalam A. Gardiner Mawatha
Colombo 02, Sri Lanka
Timetable
Concept Clearance -
Fact Finding -
MRM -
Approval 06 Jun 2019
Last Review Mission -
Last PDS Update 06 Jun 2019

TA 9741-SRI

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
06 Jun 2019 - 06 Jun 2019 31 May 2020 - -
Financing Plan/TA Utilization Cumulative Disbursements
ADB Cofinancing Counterpart Total Date Amount
Gov Beneficiaries Project Sponsor Others
225,000.00 0.00 0.00 0.00 0.00 0.00 225,000.00 06 Jun 2019 1,576.00

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