Petronet LNG Signs MoU with LTL Holdings for LNG Supply in Sri Lanka

An agreement was reached between LTL Holdings Limited and Petronet LNG Limited on 20th August 2024 to establish Liquefied Natural Gas (LNG) infrastructure for the Sobadhanavi Combined Cycle Power Plant in Sri Lanka. This partnership marks a significant step forward in securing a reliable and efficient energy supply for the country. The MOU outlines the plan to develop facilities for storing, regasifying, and distributing LNG, thereby supporting the power plant's operations and contributing to Sri Lanka's energy production.

The signing ceremony occurred at the Galadari Hotel in Colombo, marking a significant milestone for both companies. Mr. Nuhuman Marikkar, the Chief Executive Officer of LTL Holdings Limited, and Mr. Akshay Kumar Singh, the Chief Executive Officer and Managing Director of Petronet LNG Company, were the key signatories. This agreement signifies a pivotal collaboration between the two organizations, aiming to advance their mutual interests and strengthen their strategic partnership in the energy sector.

At the event, Minister of Power and Energy Kanchana Wijesekera emphasized that the MOU represents a crucial component of President Ranil Wickremesinghe’s comprehensive energy strategy. This initiative is designed to secure a reliable and high-quality electricity supply at reduced costs, thereby enhancing the overall energy infrastructure and delivering significant benefits to consumers throughout Sri Lanka.

The collaboration between LTL Holdings and Petronet LNG Limited marks a pivotal advancement in Sri Lanka's energy modernization strategy, aiming to curtail reliance on conventional fuels and shift towards a more sustainable and economically viable energy landscape.

Minister Wijesekera highlighted that despite challenging policy decisions concerning electricity tariffs over recent years, the Ceylon Electricity Board (CEB) has achieved a debt-free status, reinforcing its financial health. This improved fiscal position has attracted new agreements and spurred both domestic and international investments in the energy sector.

In a move to address the immediate LNG supply needs for the Sobadhanavi Power Plant, the partnership has established a technical solution for LNG importation from Petronet's Kochi terminal in India via cryogenic ISO containers. Upon arrival at Colombo Port, the LNG will be transferred in ISO containers to the Kerawalapitiya storage and regasification terminal, which will be constructed adjacent to the Sobadhanavi plant.

Minister Kanchana Wijesekara highlighted the urgency of addressing Sri Lanka’s electricity needs during the recent energy crisis. The crisis prompted discussions on various solutions, with a particular emphasis on using Liquefied Natural Gas (LNG) to reduce costs and enhance energy reliability. In March of the previous year, a delegation, including the Secretary to the Indian Ministry of Natural Gas and Petroleum, visited Sri Lanka to present an initial proposal for an LNG project.

The initial phase of the Sobadhanavi plant is scheduled for commissioning in August 2024, with the second phase expected to commence in early 2025. Developed and managed by Lakdhanavi Limited, the energy development subsidiary of LTL Holdings, this plant will significantly bolster Sri Lanka’s energy production capacity. The initiative aligns with the government’s goal of a sustainable and economically efficient energy future, marking substantial progress in the country’s clean energy transition.