The Asian Development Bank (ADB) is financing a technical assistance that supports a feasibility study and survey on adopting liquefied natural gas (LNG) power generation to diversify the energy mix in Sri Lanka. The approved financing is worth $225,000.

The feasibility study will

• Identify the optimal LNG facility for Sri Lanka, and the most suitable location for the development of new LNG-fired power plants and its associated facilities;
• Consider other factors, such as 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.

In March 2019, the Government of Sri Lanka requested for ADB's support in exploring LNG as a fuel for power generation. The pre-feasibility study conducted by the state-owned Ceylon Electricity Board underlined the need to set up an LNG terminal and other infrastructure for supplying LNG for power generation at the earliest possible time. Developing LNG as an energy source in Sri Lanka is in line with the aim of the Ministry of Power and Renewable Energy of the Government of Sri Lanka to reduce the country’s dependence on oil and coal, especially for power generation.

The SASEC Vision outlines Sri Lanka's potential to become the region's transshipment and storage hub for LNG and liquified petroleum gas (LPG). Maldives, specifically, is considering importing LNG for power generation and other uses, and Sri Lanka could tap into this potential for energy cooperation. Both Sri Lanka and Maldives would benefit from lower energy costs through an LNG terminal in the region.

Related Links:

• ADB Project Data Sheet
• Gas hub to be developed in Sri Lanka; will supply fuel to Maldives