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Sri Lankan LNG FSRU project extends deadline for the fourth time

2019/03/08 12:00

By Kamlesh Trivedi

 

Sri Lanka extended the deadline for a LNG floating storage regasification unit (FSRU) project for the fourth time to Apr 2, 2019. The Sri Lankan government late last month had extended the deadline from Feb 28 to Apr 2 for the FSRU project. The original deadline was set for Dec 12, 2018 but was extended to January 31, 2019. Once again the deadline was extended to Feb 28, 2019 and now to Apr 2 for bidders to submit their proposals for the FSRU project to compete with Korean major SK E&S.

Korean major SK E&S had submitted its proposal to set up an FSRU based LNG receiving terminal outside Colombo Harbour and supply 1.00mil mt/year LNG to state-owned Ceylon Electricity Board (CEB) for a period of 20 years. Under the ‘take or pay’ contract CEB would be contractually bound to pay for the LNG and a penalty if the agreed quantity is not consumed. The deadline for the FSRU project was extended apparently because the Sri Lankan government wanted more companies to participate in the tendering process to compete with SK E&S.

The Sri Lankan government had offered procurement of LNG and the FSRU project to a single entity whereas CEB has insisted on two separate contracts for two different entities for LNG procurement as well as FSRU infrastructure. There was no clarity over the benchmark price for LNG. The proposed agreement is for 20 years, commencing from the second half of 2020 to March 2040.

 

 

 

India : Energy Desk  Kamlesh Trivedi  +91-98795-50717
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