The Sri Lankan government is re-evaluating the proposed Liquefied Natural Gas (LNG) deal with Petronet LNG Limited, an Indian state-owned company, according to Energy Ministry Secretary Professor Udayanga Hemapala. The project, initially considered during the tenure of former Power and Energy Minister Kanchana Wijesekera, remains under consideration despite the change in administration.
Professor Hemapala emphasized that the urgent need for a short-term solution to the nation’s energy crisis is driving the reassessment. He explained that while a new evaluation of the Petronet proposal is currently underway, the government recognizes the importance of immediate measures to address growing energy demands.
The proposed partnership with Petronet is a government-to-government initiative aimed at enhancing Sri Lanka’s LNG imports and infrastructure. If approved, the project will be managed by Lakdhanavi, a subsidiary of LTL Transformers Ltd. Lakdhanavi, which already oversees its own LNG fuel requirements, is expected to take charge of the LNG procurement and infrastructure development.
In addition to reconsidering the Petronet deal, the government is reviewing the power purchase agreement (PPA) that was originally structured under the previous administration. This review is intended to ensure that the agreement aligns with the new government’s energy policies and economic priorities.
To explore the feasibility of resuming the suspended LNG procurement tender, the Ministry of Energy has formed a committee comprising ministry officials, representatives from the Ceylon Electricity Board (CEB), and other relevant stakeholders. The committee will assess whether resuming the previous tender is a viable option.
However, Professor Hemapala cautioned that issuing a new tender could delay the project by up to two years, exacerbating the country’s energy challenges. “Even if we resume the tender, the Petronet proposal must still be considered as part of a broader strategy to implement a swift and effective solution,” he explained.
As the government continues to explore its options, a final decision on the Petronet deal is expected in the coming months, with energy security remaining a top priority amidst rising electricity demand and financial constraints.
