A Framework Agreement has been signed between the Government of Sri Lanka and New Fortress Energy (NFE) to construct a new offshore liquefied natural gas (LNG) receiving, storage and regasification terminal.

It will become Sri Lanka’s first LNG terminal and will be supplying gas to the country’s power plants, primarily located in the Kerawalapitiya Power Complex.

Located off the coast of Colombo, the terminal will supply natural gas to the 300-megawatt (MW) Yugadanavi Power Plant, with negotiations ongoing regarding a purchase of the Government’s 40% stake in the company that owns the power plant.

Commenting on Sri Lanka’s transition to clean energy, Wes Edens, Chairman and CEO of New Fortress Energy, said, “This investment in Sri Lanka’s first LNG terminal will advance the country’s clean energy transition and support sustainable development for this vibrant economy.”

“This is the first of what we think will be a number of investments in power and infrastructure in the country.”

A per the agreement, obtainment of permits and entitlements by New Fortress to construct the terminal will be facilitated by the Government and is expected to begin operations by the second half of 2022.

Commercial agreements relating to the purchase of the Government’s interest in the company owning the power plant are to be finalised and is subject to final documentation.