Sri Lanka to Introduce Compressed Natural Gas for Power Generation and other Sectors

28th December 2010, www.ft.lk, By Deepal V Perera

The Government yesterday announced that it is to venture into a US$ 52 million (Rs.5.2 billion) project to introduce Compressed Natural Gas (CNG) to be used for power generation was well as other sectors of the economy.

Minister for Power and Energy Champika Ranawaka told Daily FT that the new project is expected to be completed in two years and once completed it would reduce the country’s dependence on diesel, coal and water to generate power.

“Presently we are using three to four diesel turbines which contribute 700 megawatts of power to the national grid. By using diesel we have to pay Rs.20 for each unit, but if we use CNG the cost per unit will be only Rs.10. So what we are going to do is to introduce CNG for these plants which will bring an overall saving of 60% on our fuel bill and reduce our carbon emissions by 50%,” he said.

Under this plan a CNG processing floating plant will be anchored at the seafront of Kerawalapitiya from where the gas would be brought to the plant by ships and then pumped to the storage at the Kerwalapitiya plant.

“By switching to CNG we will be reducing our dependence on diesel, coal and water for the energy production. By engaging other energy input sources we will be creating an energy mix for the country,” Minister Champika said. Commenting on the cost involved in converting the present diesel power plants to work on CNG, the minister said, the existing plants were dual mode plants which could be converted to work on CNG without any modification.

“The other good thing about CNG is that it can be used in other sectors such as transportation and hotel sector. So we are hoping to expand CNG into other sectors as well where the benefit could be channelled to these sectors mainly to reduce costs and also control emissions. On the other hand CNG will be the option for the country’s future energy needs as it has been reported to last for another 100 generations whereas fossil fuels are predicted to become out of supply in time to come,” Minister Ranawaka said.

The Minister also commented that that new venture would be handled by Lanka Transformers Limited a subsidiary of the Ceylon Electricity Board (CEB).

Commenting on the future plans for the CEB the minister said that the Board was expected to release its Annual Report by 1 January indicating its plans for the future as well as the income received and expenses incurred during 2010.