U.S. infrastructure firm New Fortress Energy will invest in a gas-fired power plant and proposed liquefied natural gas (LNG) supply terminal in Sri Lanka.
The agreement with the Democratic Socialist Republic of Sri Lanka approved New Fortress Energy’s investment in West Coast Power Ltd., owner of the 310-MW Yugadanavi power plant in Colombo. The deal also sets into motion a plan to develop a new LNG terminal in the area and provide gas supply rights to a power plant that will be expanded in the future, according to the release.
New Fortress will acquire a 40-percent stake in West Coast Power. The U.S. firm will build an offshore LNG receiving, storage and regasification terminal near Colombo, eventually supplying an estimated 1.2 million gallons per day to the power generation sector in the southern Asian island nation.
“This is a significant milestone for Sri Lanka’s transition to cleaner fuels and more reliable, affordable power,” Wes Edens, chairman and CEO of New Fortress, said in a statement. “We are pleased to partner with Sri Lanka by investing in modern energy infrastructure that will support sustainable economic development and environmental gains.”
The Kerawalapitya Power Complex is a centerpiece of the Sri Lankan baseload power capacity. Along with the 310-MW power plant, future plans call for an additional 700 MW to be added.
The 310 MW Yugadanavi Power Plant currently has a long-term power purchase agreement to provide electricity to the national grid that extends through 2035. This power plant consists of General Electric turbines and is configured to run on natural gas in combined cycle.
An LNG terminal allows the country to off-take natural gas, sometimes U.S.-drilled and produced, and use it for power generation and other energy needs. Natural gas vapor is chilled to an extreme low temperature to liquify it and make it stable for shipping, then delivered and re-gasified for use in the power sector.
The LNG terminal is scheduled to begin operations in 2023.