India has announced plans to deliver liquefied natural gas (LNG) to Sri Lanka as part of its efforts to deepen bilateral energy ties. This development coincided with the first official visit of Sri Lanka’s newly elected President, Anura Kumara Dissanayake, to India following his victory in the September presidential election. Indian Prime Minister Narendra Modi warmly welcomed the Sri Lankan leader, emphasizing the growing energy collaboration between the two nations.
Expanding LNG Infrastructure in Sri Lanka
In August 2024, India’s Petronet LNG Limited and Sri Lanka’s LTL Holdings Limited formalized a partnership through a Memorandum of Understanding (MoU) to enhance Sri Lanka’s LNG infrastructure. The project includes the development of LNG unloading, storage, and regasification facilities at Kerawalapitiya in Colombo. These facilities will supply LNG to the Sobadhanavi Power Plant, significantly boosting Sri Lanka’s power generation capacity by 350 MW by early 2025.
Petronet’s LNG will be transported from its Kochi terminal in India using ISO tank containers. These containers will be shipped to Colombo Port and subsequently distributed to power plants. This streamlined logistics approach aims to ensure a steady and reliable energy supply for Sri Lanka.
Supporting Environmental Goals
The Sobadhanavi Power Plant will primarily operate on LNG and has the potential to incorporate up to 30% hydrogen in its operations, aligning with Sri Lanka’s environmental objectives. This initiative reflects the country’s commitment to reducing greenhouse gas emissions and transitioning to cleaner energy sources.
Additionally, the partnership complements other renewable energy collaborations between India and Sri Lanka, including solar and wind power projects. By diversifying its energy portfolio, Sri Lanka aims to reduce dependence on costly oil imports, paving the way for a more sustainable energy future.
Broader Energy Cooperation
India and Sri Lanka are also exploring other significant energy projects. These include a high-capacity power grid interconnection between the two countries and a trilateral initiative with the United Arab Emirates (UAE) to construct a multi-product energy pipeline. This pipeline is expected to deliver affordable and reliable energy supplies from India to Sri Lanka.
The two nations are considering the joint development of offshore wind power potential in the Palk Strait. These efforts will prioritize environmental sustainability while tapping into the region’s renewable energy potential.
Financial and Crisis Support
India’s support for Sri Lanka extends beyond energy. During Sri Lanka’s 2022 economic crisis, India provided $4 billion in emergency financial assistance, including forex support. Furthermore, India has participated in preliminary debt restructuring agreements with Sri Lanka, alongside other international creditors such as China.
Strengthening Energy Security
The Indian Ministry of External Affairs highlighted the leaders’ shared commitment to ensuring reliable, affordable, and timely energy resources for their nations. The timely implementation of ongoing projects, including the LNG supply chain, remains a priority for both governments.
Earlier this year, Petronet LNG and LTL Holdings agreed to supply LNG to Sri Lanka’s dual-fueled power plants under a five-year agreement. The initiative is expected to bolster Sri Lanka’s energy security while fostering closer economic and strategic ties with India.
By prioritizing collaborative energy projects, both nations aim to secure their energy needs while advancing shared sustainability goals, marking a significant step forward in their bilateral partnership.
