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Importing Liquefied Natural Gas – II

by Dr Janaka Ratnasiri

In Part I of this article, the Writer published in The Island of 11.01.2021, the writer estimated that liquefied natural gas (LNG) imported through the proposed floating storage and regasification unit (FSRU) will take a minimum of six years before the gas could be delivered, considering the possible delays likely to be encountered at every approval stage and the time taken for mobilizing the FSRU. He also said that there are faster ways of getting LNG into the country bypassing all these procedures which are discussed here.

 

TRADITIONAL METHODS OF IMPORTING LNG

 

Traditionally, LNG is transported in purposely built carriers of capacity 150,000 – 260,000 cubic metres (cm), which need jetties with depth over 16 m to berth. The terminal for unloading LNG requires insulated storage tanks built on the jetty enabling transfer of LNG to the tank using solid arms, vapourizers to convert LNG into gas and compressors to pressurize the gas before dispatching to customers through pipelines.

The quantity of LNG required to operate combined cycle gas turbine (CCGT) type power plants of capacity 1,000 MW at 85% plant factor is about 1 Mt, which is the minimum throughput required for economically viable operation. It is estimated that such a terminal will cost over USD 500 million and take over five years to complete.

The Writer in his article on 06.01.2021 mentioned that setting up the proposed FSRU will take a minimum of six years to commission including the time taken for obtaining many approvals, though the actual setting up time will not likely be more than 3 years.

 

USE OF LOW DRAUGHT SMALL CARRIERS

 

On the West Coast North of Colombo, the sea close to the coast is rather shallow, with the 5 fathom (9.1 m) bathymetry contour lying about 1.25 km from the coast, and the 10 fathom (18.2 m) bathymetry contour lying about 6.5 km from the coast. Hence, it is difficult to construct a traditional land-based terminal close to Colombo. However, a site has been identified at Dikkowita where there is a break in the reef which allows shallow boats to be brought in. Already a Fishery Harbour has been built at this site, and the Ministry of Fisheries had called for proposals to develop projects around the harbour. In response, a proposal was submitted to build a mini-LNG terminal adjoining the Fishery Harbour seawards and this was accepted by the Fisheries Ministry with concurrence of stakeholder organizations.

Hence, one option is to build such a mini-terminal. The proposed project envisages deploying small LNG carriers with capacity 16,000 cm (7,200 t) having a draught below 5 m to bring LNG to the country. For storage, two cryogenic tanks each of capacity 10,000 t of LNG (22,200 cm) were planned to be built on the jetty enabling transfer of LNG from a carrier direct to the storage tank. A gas-fired 300 MW CCGT power plant operating at 80% plant factor requires 285 kt of LNG annually or 24 kt of LNG monthly. With the capacity of the carrier being only 7,200 t of LNG, it has to bring 40 loads of LNG annually or 3.3 loads a month. The proponent has proposed that LNG will be supplied at the spot market price prevailing at Singapore LNG Terminal on short term contract, with supply agreements signed when the spot market price is low with safeguards against price hikes that prevail during Winter when the demand for LNG is high.

The project though accepted by the Ministry of Fisheries and a pre-feasibility study completed, it is yet to receive approval of the Ministry of Energy (MoE) which is mandated to authorize LNG import and distribution. LNG is not a commodity that can be purchased off the shelf. It has to be ordered years or months ahead even on the spot market. Unless the MoE gives the green light for the project, Proponent is unable to enter into any contract for the supply of LNG and undertake an Environmental Impact Assessment (EIA) study. Hence, sooner the MoE grants approval, earlier it will be possible to meet the President’s aspirations.

 

USE OF ISO INSULATED CONTAINERS

 

A second option is to bring LNG loaded in insulated standard size containers conforming to ISO Standards in normal container carriers. Once the LNG container is transported to Colombo Port, it could be unloaded on to a road truck and taken direct to a customer site. In view of the highly flammable nature of LNG, particularly if it leaks out and get vaporized, its delivery through the Port and transporting along highways need special approval of the Ports Authority and the Motor Traffic Department, respectively. Transporting of gas across the country as LNG in containers is a more convenient method than using pipelines, because the latter requires many time-consuming approvals, land acquisitions, long construction time and social impacts.

Once delivered at the site, the consumer has two options to unload LNG. Either, a separate insulated tank could be built to store the delivered LNG which could be subsequently re-gasified and transferred to the power plant or the factory in pipelines. Since it is expensive to build LNG storage tanks, the other option is to use the container itself for storage which can hold the gas in liquid form for over two months. With this option, it is necessary to construct three platforms on to which the containers could be unloaded. One will be for keeping the container in use, second is to keep the empty container once it runs out of gas and the third is to keep the new container.

A 40 ft container has a capacity of 46 kl of LNG which has an energy content of about 1,000 GJ. The energy demand of a 300 MW CCGT power plant as shown before is 285 kt of LNG annually which is equivalent to about 46,000 GJ per day. This means a 300 MW CCGT power plant can be fed with 46 container loads of LNG per day imported in standard size containers. Currently, Colombo Port handles more than 5,500 of 20 ft equivalent containers daily, and therefore additional 46 containers will pose no problem. Also, with the anticipated expansion of the Port, it should be able to handle even a higher volume of containers to feed more power plants.

President’s Saubhagye Dekma Policy Framework says “Convert Kelanitissa plant to a natural gas turbine plant and implement two similar plants in Kerawalapitiya and Hambantota before 2023”. The only way to bring NG to Kelanitissa and Kerawalapitiya before 2023 to realize the President’s aspiration is to use insulated containers as described above. Hence, the relevant authorities should give the necessary clearance for this project as a matter of priority.

 

SUPPLYING LNG FOR DIFFERENT APPLICATIONS

 

For the operation of a power plant, it is necessary to have a separate storage tank for transferring the LNG brought in containers before it is vapourized for feeding to the power plant since continuity of supply is important. For use in Industrial Estates or Housing Schemes, where the demand is low, the second option mentioned above is more suitable. Once re-gasified, the gas could be supplied to individual industries in an Industrial Estate or individual apartments in a housing scheme in a local pipeline network, managed by an approved organization having licensed staff.

Containers containing LNG meant for transport applications could be taken to a central yard where the LNG is converted into gas and then pressurized for loading into CNG bowsers. Vehicles with spark-ignited (SI) engines could easily be converted into operation with natural gas, supplied under pressure as CNG in bowsers designed for CNG transport. Facilities for dispensing CNG to motor vehicles could be made available at road-side fuel outlets, using the same procedure as that used for transporting LPG and feeding it to vehicles. The only requirement is that the operator will have to obtain a licence from the Petroleum Corporation and enhance the fire-fighting facilities in view of the additional fire risks. With the introduction of NG operated vehicles, the vehicle emission testing centres will become redundant.

Natural gas cannot be used directly in compression-ignited engines as it lacks properties to self-ignite upon compression as in the case of diesel oil. But it can be used blended slightly with diesel, which will provide the necessary ignition while NG will provide the necessary power. Though the use of NG as a substitute for diesel will reduce air pollution and has a price advantage, it does not give the same power output as that from a diesel engine with similar capacity. Further, NG operated heavy vehicles are about 50% more expensive than a similar diesel heavy vehicle. Hence, its use has not caught up like in the case of vehicles with SI engines.

 

OTHER OPTIONS AVAILABLE

 

The Cabinet of Ministers, at its meetings held on 09th May and 02nd October, 2018, has granted approval for a Chinese Company to build a 400 MW gas-fired power plant at Hambantota Port along with an LNG terminal, as a government-to-government project and implemented as a joint venture with the CEB. The electricity generated will be used solely for feeding the Chinese Industrial Estate at Hambantota. The project has been granted necessary approvals including EIA on a fast tract basis and its construction is underway.

A third option is to negotiate with China to permit Sri Lanka to use its terminal for bringing LNG in separate carriers engaged by Sri Lanka, upon payment of a toll fee. In many instances, LNG terminals are operating below capacity and if it is the case with the terminal at Hambantota, this should be possible. On the other hand, Sri Lanka could negotiate with China to import and supply Sri Lanka’s requirements at an agreed price.

The imported LNG after regasification could be brought to Kerawalapitiya and Kelanitissa in pipelines possibly laid along the Highway Reservation from Hambantota with no issues of land acquisition coming up. However, laying of a gas pipeline requires a detailed EIA study, which may take a minimum of one year including time taken to issue the terms of reference and public scrutiny time. In addition, the time taken for negotiations with China and getting approval from the Cabinet will take a minimum of one more year.

Thereafter, preparing bid documents and calling for proposals from prospective contractors, evaluating the proposals and awarding the contract and carrying out the actual work will likely to take at least another 3 years, which will extend the total time period to 5 years. It may be possible to fast tract the process by conducting some of these activities in parallel. One advantage of this option is that it is a more permanent solution than the rest, but will have to depend on the Chinese for its sustenance.

 

CONCLUSION

 

Several options are available for importing LNG other than building a land-based or a floating terminal as currently proposed. Some of these are of shorter duration but of limited capacity, while another is of permanent nature and also has high capacity. However, a final decision has to be taken after carrying out a detailed technical and financial assessment of each option, assessing the future demand for overall energy in the country as well as possible sectors where energy needs could be met from natural gas. The Ministry of Energy will have to give the highest priority to undertake such a study.

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Govt.’s choice is dialogue over confrontation

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By Jehan Perera

Preparing for the forthcoming UN Human Rights Council cannot be easy for a government elected on a nationalist platform that was very critical of international intervention. When the government declared its intention to withdraw from Sri Lanka’s co-sponsorship of the October 2015 resolution No. 30/1 last February, it may have been hoping that this would be the end of the matter. However, this is not to be. The UN Human Rights High Commissioner’s report that will be taken up at the forthcoming UNHRC session in March contains a slate of proposals that are severely punitive in nature and will need to be mitigated. These include targeted economic sanctions, travel bans and even the involvement of the International Criminal Court.

Since UN Secretary General Ban Ki-Moon’s visit in May 2009 just a few days after the three-decade long war came to its bloody termination, Sri Lanka has been a regular part of the UNHRC’s formal discussion and sometimes even taking the centre stage. Three resolutions were passed on Sri Lanka under acrimonious circumstances, with Sri Lanka winning the very first one, but losing the next two. As the country became internationally known for its opposition to revisiting the past, sanctions and hostile propaganda against it began to mount. It was only after the then Sri Lankan government in 2015 agreed to co-sponsor a fresh resolution did the clouds begin to dispel.

Clearly in preparation for the forthcoming UNHRC session in Geneva in March, the government has finally delivered on a promise it made a year ago at the same venue. In February 2020 Foreign Minister Dinesh Gunawardena sought to prepare the ground for Sri Lanka’s withdrawal from co-sponsorship of UN Human Rights Council resolution No 30/1 of 2015. His speech in Geneva highlighted two important issues. The first, and most important to Sri Lanka’s future, was that the government did not wish to break its relationships with the UN system and its mechanisms. He said, “Sri Lanka will continue to remain engaged with, and seek as required, the assistance of the UN and its agencies including the regular human rights mandates/bodies and mechanisms in capacity building and technical assistance, in keeping with domestic priorities and policies.”

Second, the Foreign Minister concluding his speech at the UNHRC session in Geneva saying “No one has the well-being of the multi-ethnic, multi-lingual, multi-religious and multi-cultural people of Sri Lanka closer to their heart, than the Government of Sri Lanka. It is this motivation that guides our commitment and resolve to move towards comprehensive reconciliation and an era of stable peace and prosperity for our people.” On that occasion the government pledged to set up a commission of inquiry to inquire into the findings of previous commissions of inquiry. The government’s action of appointing a sitting Supreme Court judge as the chairperson of a three-member presidential commission of inquiry into the findings and recommendations of earlier commissions and official bodies can be seen as the start point of its response to the UNHRC.

 

 

NEGATIVE RESPONSE

 

The government’s setting up of a Commission of Inquiry has yet to find a positive response from the international and national human rights community and may not find it at all. The national legal commentator Kishali Pinto Jayawardene has written that “the tasks encompassed within its mandate have already been performed by the Lessons Learnt and Reconciliation Commission (LLRC, 2011) under the term of this President’s brother, himself the country’s Executive President at the time, Mahinda Rajapaksa.” Amnesty International has stated that “Sri Lanka has a litany of such failed COIs that Amnesty International has extensively documented.” It goes on to quote from the UN High Commissioner for Human Rights that “Domestic processes have consistently failed to deliver accountability in the past and I am not convinced the appointment of yet another Commission of Inquiry will advance this agenda. As a result, victims remain denied justice and Sri Lankans from all communities have no guarantee that past patterns of human rights violations will not recur.”

It appears that the government intends its appointment of the COI to meet the demand for accountability in regard to past human rights violations. Its mandate includes to “Find out whether preceding Commissions of Inquiry and Committees which have been appointed to investigate into human rights violations, have revealed any human rights violations, serious violations of the international humanitarian law and other such serious offences.” In the past the government has not been prepared to accept that such violations took place in a way that is deserving of so much of international scrutiny. Time and again the point has been made in Sri Lanka that there are no clean wars fought anywhere in the world.

International organisations that stands for the principles of international human rights will necessarily be acting according to their mandates. These include seeking the intervention of international judicial mechanisms or seeking to promote hybrid international and national joint mechanisms within countries in which the legal structures have not been successful in ensuring justice. The latter was on the cards in regard to Resolution 30/1 from which the government withdrew its co-sponsorship. The previous government leaders who agreed to this resolution had to publicly deny any such intention in view of overwhelming political and public opposition to such a hybrid mechanism. The present government has made it clear that it will not accept international or hybrid mechanisms.

 

 

SEQUENTIAL IMPLEMENATION

 

In the preamble to the establishment of the COI the government has made some very constructive statements that open up the space for dialogue on issues of accountability, human rights and reconciliation. It states that “the policy of the Government of Sri Lanka is to continue to work with the United Nations and its Agencies to achieve accountability and human resource development for achieving sustainable peace and reconciliation, even though Sri Lanka withdrew from the co-sponsorship of the aforesaid resolutions” and further goes on to say that “the Government of Sri Lanka is committed to ensure that, other issues remain to be resolved through democratic and legal processes and to make institutional reforms where necessary to ensure justice and reconciliation.”

As the representative of a sovereign state, the government cannot be compelled to either accept international mechanisms or to prosecute those it does not wish to prosecute. At the same time its willingness to discuss the issues of accountability, justice and reconciliation as outlined in the preamble can be considered positively. The concept of transitional justice on which Resolution No 30/1 was built consists of the four pillars of truth, accountability, reparations and institutional reform. There is international debate on whether these four pillars should be implemented simultaneously or whether it is acceptable that they be implemented sequentially depending on the country context.

The government has already commenced the reparations process by establishing the Office for Reparations and to allocate a monthly sum of Rs 6000 to all those who have obtained Certificates of Absence (of their relatives) from the Office of Missing Persons. This process of compensation can be speeded up, widened and improved. It is also reported that the government is willing to consider the plight of suspected members of the LTTE who have been in detention without trial, and in some cases without even being indicted, for more than 10 years. The sooner action is taken the better. The government can also seek the assistance of the international community, and India in particular, to develop the war affected parts of the country on the lines of the Marshall Plan that the United States utilized to rebuild war destroyed parts of Europe. Member countries of the UNHRC need to be convinced that the government’s actions will take forward the national reconciliation process to vote to close the chapter on UNHRC resolution 30/1 in March 2021.

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Album to celebrate 30 years

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Rajiv Sebastian had mega plans to celebrate 30 years, in showbiz, and the plans included concerts, both local and foreign. But, with the pandemic, the singer had to put everything on hold.

However, in order to remember this great occasion, the singer has done an album, made up of 12 songs, featuring several well known artistes, including Sunil of the Gypsies.

All the songs have been composed, very specially for this album.

Among the highlights will be a duet, featuring Rajiv and the Derena DreamStar winner, Andrea Fallen.

Andrea, I’m told, will also be featured, doing a solo spot, on the album.

Rajiv and his band The Clan handle the Friday night scene at The Cinnamon Grand Breeze Bar, from 07.30 pm, onwards.

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LET’S DO IT … in the new normal

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The local showbiz scene is certainly brightening up – of course, in the ‘new normal’ format (and we hope so!)

Going back to the old format would be disastrous, especially as the country is experiencing a surge in Covid-19 cases, and the Western Province is said to be high on the list of new cases.

But…life has to go on, and with the necessary precautions taken, we can certainly enjoy what the ‘new normal’ has to offer us…by way of entertainment.

Bassist Benjy, who leads the band Aquarius, is happy that is hard work is finally bringing the band the desired results – where work is concerned.

Although new to the entertainment scene, Aquarius had lots of good things coming their way, but the pandemic ruined it all – not only for Aquarius but also for everyone connected with showbiz.

However, there are positive signs, on the horizon, and Benjy indicated to us that he is enthusiastically looking forward to making it a happening scene – wherever they perform.

And, this Friday night (January 29th), Aquarius will be doing their thing at The Show By O, Mount Lavinia – a beach front venue.

Benjy says he is planning out something extra special for this particular night.

“This is our very first outing, as a band, at The Show By O, so we want to make it memorable for all those who turn up this Friday.”

The legendary bassist, who lights up the stage, whenever he booms into action, is looking forward to seeing music lovers, and all those who missed out on being entertained for quite a while, at the Mount Lavinia venue, this Friday.

“I assure you, it will be a night to be remembered.”

Benjy and Aquarius will also be doing their thing, every Saturday evening, at the Darley rd. Pub & Restaurant, Colombo 10.

In fact, they were featured at this particular venue, late last year, but the second wave of Covid-19 ended their gigs.

Also new to the scene – very new, I would say – is Ishini and her band, The Branch.

Of course, Ishini is a singer of repute, having performed with Mirage, but as Ishini and The Branch, they are brand new!

Nevertheless, they were featured at certain five-star venues, during the past few weeks…of their existence.

 

 

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