Govt.’s secret deal with US company affects Lanka’s sovereignty, says FSP

By Rathindra Kuruwita 

Sri Lanka was now dependent on the United States to supply LNG to Sri Lankan power stations thanks to an agreement it had entered into with a US-based energy company, New Fortress Energy, on Friday night, the Frontline Socialist Party (FSP) alleged yesterday.

FSP Education Secretary Pubudu Jayagoda said that the agreement between the government and US-based energy company New Fortress Energy to construct a new offshore liquefied natural gas (LNG) receiving, storage and regasification terminal at Kerawalapitiya as well as the transfer of government’s shares in the Yugadanavi Power Plant had to be scrapped.

He said that the agreement had been signed in the late hours of Friday.

“This secret agreement was signed at a time when people are barred from protesting or making a meaningful intervention. The Yugadanavi Power Station at Kerawalapitiya already produces 300 MWs of energy and there is a plan to build another 350 MW plant there. The US company has now been allowed to build an offshore LNG receiving, storage, and regasification terminal and to provide LNG to the existing Power Station and the new 350 MW power plant to be built,” he said.

The government was planning to increase this to 1000 MWs by 2026. In 2016, international tenders were called for the construction of the 350 MW LNG power plant. The two main contenders were China Harbour and Yugadanavi, which is a state owned company, with the Treasury owning 50% the balance 50% divided between EPF, LECO and LTL.

“But the government gave to China Harbour, and Yugadanavi filed a case against the government over its decision. In 2020 President Gotabaya Rajapaksa cancelled the tender given to China Harbour and gave the right to Yugadanavi, which at that time looked good. However there was a conspiracy, Yugadanavi signed an agreement with the US based energy company New Fortress Energy. With this MoU 40% of the company shares will be given to the US company,” Jayagoda said.

He said the agreement was worse than East Container Terminal pact.

“On 12 July this was discussed by the Cabinet but even the Minister of Power didn’t get a copy until the meeting started. Then Minister Basil Rajapaksa presented the paper and obtained the approval of ministers. The agreement calls for the sale of a large number of shares to the US company as well as the building an offshore LNG receiving, storage, and regasification terminal to provide LNG to the existing Power Station as well as the new 350 MW power plant to be built. This is clearly said on the Company website,” he said.

Given that the pipelines would be controlled by a US company, Sri Lanka would lose energy sovereignty. In the future, Sri Lankans would have to depend on the whims and fancies of US political authorities, he claimed.