Jul 13, 2021

U.S. firm New Fortress to get monopoly to supply LNG for 5 years to Sri Lanka Featured

In a shocking revelation, it has surfaced that the U.S. based New Fortress Energy Inc. has obtained the consent of the Sri Lankan government to enjoy the monopoly of providing Liquid Natural Gas(LNG) for the next five years.

The New Fortess is already in the spotlight after it announced that it has signed a Framework Agreement with the Sri Lankan government to construct a new offshore liquefied natural gas (LNG) receiving, storage and regasification terminal (the “Terminal”).

The Terminal will be located off the coast of Colombo to supply gas to the country’s power plants, primarily located in the Kerawalapitiya Power Complex.

As part of the Agreement, New Fortress will supply natural gas to the existing 300 MW Yugadanavi Power Plant and is negotiating the purchase of the Government’s 40% stake in the company that owns the power plant, the company announced recently.

The latest revelation that the New Fortress would get the monopoly to supply LNG to Sri Lanka has sent shock waves across the industry, with the experts expressing fears that giving such a monopoly may cause a severe disadvantage to Sri Lanka in the future.

Experts say when such a monopoly exists, Sri Lanka would not be able to get LNG at competitive prices even when the prices go down in the international market.

Besides, the monopoly is to be extended to the New Fortress at a time when a tender has been called to build a Floating Storage Regasification Unit. The tender submission date ended on June 18.

It is learnt that the New Fortress has not submitted an application or quotation for that tender. Only China Harbour and LTL Holdings have submitted applications for that tender.

At the time, questions were being raised as to why a tender was being given to the U.S. company when measures were being taken to convert the Kelanitissa Diesel Power Plant into a plant run by LNG.