Energy

LNG Terminal Revival: Sri Lanka Restarts Stalled Project for 2028 Rollout


Government Revives 2021 Tender to Cut Energy Costs and Support Renewable Transition


Sri Lanka has officially relaunched its LNG Terminal Revival project, aiming to bring liquefied natural gas into the national energy mix by 2028. Power and Energy Minister Kumara Jayakody told Parliament that the government is moving ahead with a previously halted tender from 2021, originally called by the Ceylon Petroleum Corporation (CPC) and the Ceylon Electricity Board (CEB).

The project centers around a Floating Storage and Regasification Unit (FSRU) under a Build-Own-Operate (BOO) model. It is intended to supply LNG to a 300MW plant that currently runs on diesel—one of the country’s most expensive fuels. Committees have been reappointed to oversee the revived tender process, and LNG delivery is expected to begin by 2028.

Minister Jayakody emphasized that while LNG is costlier than coal, it plays a key role in Sri Lanka’s transition toward renewables. Current power generation costs range widely: hydro (Rs. 1–12.69/unit), coal (Rs. 20.80), diesel and thermal (Rs. 45.52–174.27), solar (Rs. 27.26–35.50), and wind (Rs. 12.27).

The LNG Terminal Revival also follows controversy over the previous administration’s unsolicited New Fortress deal, which locked the CEB into a rigid ‘take-or-pay’ LNG supply. The new BOO model offers more flexibility, with LNG purchased at market prices.

Beyond electricity, LNG may be used in public transportation, offering further diversification. With this revival, Sri Lanka hopes to secure cleaner, more reliable energy while managing long-term costs.