US /Canada LNG project requests President its rightful place
In pursuit of increasing Sri Lanka’s power generation, the government will be going ahead with three major liquefied natural gas deals with China, India and Japan to add 1400 MW to the national grid without considering a US/ Canada and Sri Lanka joint venture project approved by the BOI in 2012, company officials alleged.
Power and Energy Minister Mahinda Amaraweera told the Business Times that the Government has a short period of time to take a decision on proposed LNG power plants as Parliament is likely to be dissolved in early March.
But he assured that necessary action will be taken to review all the LNG power projects proposals in the pipeline and maintain uninterrupted power supply.
The Cabinet has reviewed some of the LNG plants in the waiting list, including a 300 MW LNG plant that was to be built in Kerawalapitiya as a joint venture with Indian company NTPC following high level discussions between Sri Lanka and India.
It has also approved a LNG plant with a capacity of 300 MW proposed in Kerawalapitiya with funds from the Asian Development Bank.
In a letter to President Gotabaya Rajapaksa, the Greenlink Global Consulting Inc (Greenlink), the local partner of Sithe Global Power Development Inc – a fully owned subsidiary of the Blackstone Group Inc USA, has appealed to review the awarding of the tender of Kerawalapitiya /Hambantota LNG project to a Chinese firm.
In 2010 Greenlink introduced this US power and energy developer which is a subsidiary of a renowned US blue chip asset management company to Sri Lanka.
In 2012 energy developer Sithe Global Power entered into an exclusive MOU with Board of Investment of Sri Lanka (BOI) for the LNG facility, gas pipe line and 500MW-1000MW power plant project in Hambantota. The project cost was US$1.4 billion.
However in March 2013 the Ceylon Electricity Board (CEB) requested an independent study of the use of LNG as a fuel and hence the approval process was delayed, the company said.
Even after granting exclusive rights by the BOI for the development of the energy project at Hambantota to this developer, a Chinese company received cabinet approval for the use of Hambantota land and a Letter of Intent for a development of a 1000 MW power project without conducting due diligence or a feasibility study.
This circumvention of rights of the developer and Greenlink was brought to the notice of the government in 2015, Greenlink said.
Government officials have recommended at that time to initiate a government-to-government deal for the Hambantota Energy Project (HEP), the concept jointly developed by Sithe Global Power Development Inc.
Thereafter Greenlink approached the Canadian government in February 2016 and facilitated the entry of Crown Corporation of the government of Canada to take up the project.
Two prominent ministers of the previous regime allegedly circumvented the rights of the Greenlink Company to the project and handed HEP to the Chinese affiliate without disclosing the internal agreements between Sithe and the BOI, Green Link claimed.
The company has urged the President to grant them their rightful opportunity to have US and Canadian counterparts develop this project through a transparent process.