The President leaves on a state visit to Qatar next Wednesday (Oct. 25), a country diplomatically isolated by its Arab neighbours over accusations that it is funding terrorism in the region. Arguably, the richest country in the world per-capita-wise, Qatar’s Emir is the only West Asian Head of State to have visited Sri Lanka in [...]


LNG and the President’s visit to Qatar


The President leaves on a state visit to Qatar next Wednesday (Oct. 25), a country diplomatically isolated by its Arab neighbours over accusations that it is funding terrorism in the region. Arguably, the richest country in the world per-capita-wise, Qatar’s Emir is the only West Asian Head of State to have visited Sri Lanka in recent years.

There are some 130,000 Sri Lankans working in the Gulf peninsula-nation situated between Bahrain and Saudi Arabia. Despite comparatively low wages, these Sri Lankans are contributing to both, the Sri Lankan economy through remittances and the Qatari economy by helping to put up futuristic super-structures, somewhat faltering at the moment though, due to falling oil and gas prices.

Qatar is the second largest exporter of LNG (Liquid Natural Gas), a fuel cleaner than coal and oil-based products and having more and more users throughout the world.Among the importers of LNG are India (entirely) and Japan (partially), both engaged in starting an LNG plant at Trincomalee. Given Sri Lanka’s experience with the clapped-out Chinese-built Norochcholai coal plant that is more broken down than in use, and creating serious environmental issues around the Puttalam district (See Page 12), the Trinco coal plant was to be converted to an LNG plant.

The plant at Trincomalee was to balance giving the Hambantota harbour to the Chinese. These strategic diplomatic considerations should not get in the way of strategic economic thinking as well. It is therefore, incumbent on the Government to see if the President can strike a deal with the Qatari Government on securing a long-term contract for the sale of LNG. As LNG is a gas that comes naturally from the ground, it is liquified by pressure and kept at a particular temperature to transport it by ship. That is how the name derives – Liquid Natural Gas.

Then, it has to be ‘re-gassified’ to allow pumping into land and for power generation that provides energy to consumers. For this process, a country does not need expensive plants – for it can be done offshore by floating ships which also, need not be purchased but chartered. This is an option for Sri Lanka that is looking to save every dollar it can. Bangladesh is already going in for this option.

World LNG prices have fallen and this is an ideal moment to strike a deal with a friendly country like Qatar. World LNG leaders like Shell, BP, Royal Dutch, ExxonMobil etc., are in Qatar and increasingly looking for business with small countries to offset huge investments and overruns on mega-projects in search of LNG. The International Energy Agency says countries like India have been emboldened to demand concessions due to prevailing low prices. The International Finance Corporation, the private-sector arm of the World Bank, says in two years, LNG importers can play suppliers off against each other (The Economist, September 16 issue).

LNG is sold long-term and not on the spot-market like petrol. Two problems Sri Lanka will encounter therefore, notwithstanding the contractual kickbacks by politically backed businessmen are, the need to build pipelines from a plant to city, and the country’s credit-worthiness for long-term contracts. Yet, funding may still be sourced from international banks if there is a proper plan for energy generation and the sale of electricity.

Floating terminals and LNG contracts on a long-term basis with a country like Qatar is the answer when renewable energy becomes more attractive in a decade or so; and when even LNG will probably go out of fashion.The President must return from Qatar with some real, tangible benefit for the country rather than merely signing an MoU on economic cooperation like the plethora of bilateral agreements he signs when he visits other countries which are hardly ever implemented.

Political agendas hit UNESCO

Despite its brave face, the embargoes and sanctions imposed on Qatar since June this year by its Arab neighbours seem to be hurting the country, both economically and diplomatically.

Not only is Qatar seeking US dollar loans (bonds), it lost its bid to have its nominee elected as the next Director General of UNESCO, the UN agency responsible for education and culture globally. The Arab states in the voting collegiate pulled the rug below Qatar, eventually seeing the former French Minister of Culture of Moroccan origin scrape through 30-28.

The vote, however, was upstaged by the withdrawal of the United States from UNESCO citing the UN body’s alleged anti-Israeli bias. The US knows only too well that all UN agencies have their member-states’ political agendas, and not least was the US’ own agenda in sponsoring a resolution against Sri Lanka at the UNHRC.
This is not the first time the US has left and not the first time it has stopped funding the UN agency. It has returned to the fold twice as well. Its present

dministration is on an isolationist path and while it may return some day, it is unfortunate that UNESCO will be at a loss universally in the immediate future.

Reality and rhetoric

Lord Naseby must have caused some blushes at the British Foreign and Commonwealth Office with his speech last week in the House of Lords calling upon his Government to reconsider its crusade against Sri Lanka at the UNHRC.

He had to resort to the UK’s Freedom of Information Act to ferret out the fact that the British Defence Attaché in Colombo at the time the LTTE was being liquidated on the battlefield in 2009 had said in his dispatches that the Sri Lanka Army had no way of distinguishing civilians from LTTE cadres during the fighting, and the death toll was nowhere near the 40,000 that is loosely quoted by all and sundry.

Many will recall, the US Military Attaché in Colombo at the time said about the same thing and was reprimanded by his ambassador. Venezuelan President Hugo Chavez once told the UN that there was an Obama 1 who was run by the Defence Establishment, and an Obama 2 who was run by the State Department. Nothing is truer of Britain.

It is the Defence Establishments that know the realities of fighting terrorism, while their diplomats spread the gospel of human rights, selectively, in other parts of the world.

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