Sri Lanka’s Ministry of Power & Renewable Energy has launched an international competitive bidding request for proposals for a liquefied natural gas floating storage and regasification unit, writes Amanda Battersby.

The successful contractor would be required to provide a newbuild FSRU plus related pipeline infrastructure, procure the LNG and also supply gas to the Ceylon Electricity Board (CEB).

The project encompasses the design, construction and installation of an FSRU to be moored about nine kilometres north-northwest of the entrance to Colombo Port.

Regasified volumes would then be sent via two subsea pipelines to power plants at Kelanitissa and Kerawalapitiya.

The estimated initial baseload LNG demand is 600,000 tonnes per annum increasing to 1 million tpa and bidders will need to provide an FSRU with 1 million tpa nominal capacity and 2 million tpa peak capacity.

The tender notice stipulates that all bidders must submit their pricing on the assumption that they will bear the upfront investment cost of the FSRU.

The term of the gas sales agreement to be negotiated with the CEB will be 20 years.

South Korea’s SK E&S has already submitted an unsolicited proposal for an FSRU-based LNG import scheme to the CEB and the government has now decided to allow other players to compete against its plans under so-called Swiss Challenge protocols.

Under Swiss Challenge guidelines, project proponent SK would then be given the option to match the best rival bid.

If SK were unable or unwilling to match that bid, then the contract winner would have to directly reimburse the South Korean company its development costs of a little more than $10 million.

Request for Proposal documents are available from the ministry until 7 December and the deadline for the submission of counterproposals is 12 December this year.

The CEB is understood to want a 49% stake in the integrated LNG import-to-power project, likely via a joint venture with the FSRU owner operator.

Weekly

Sri Lanka seeks FSRU bids