Fuel Mix

April 24, 2009 (LBO) – Sri Lanka will decide on whether to call proposals for a liquefied natural gas (LNG) power plant after a study funded by Japan is completed, a senior government official said. Though much cleaner than coal, diesel or furnace oil, LNG, which is kept liquid under high pressure requires expensive infrastructure to handle.

There is intense lobbying for LNG use, but it has been resisted by engineers at the state-run power utility Ceylon Electricity Board (CEB), who want priority for coal plants to get the cost of the utility down.

"LNG is a matter under consideration by CEB," power ministry secretary M M C Ferdinando told reporters.

"Because there is a MOU (memorandum of understanding) signed with the Japanese government for doing a study.

"Once the study is carried out only we will take a decision whether to go for LNG as a technology."

In January 2009, the Board of Investment, Sri Lanka's investment promotion agency said it had given tax concessions to Lanka Aloka, a company set up to take forward the LNG plant.

Arc Developments, an Australian consultancy was hired to bring in international funding.

But in March, the Australian firm pulled out