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Sri Lanka has struck natural gas in Bay of Bengal adjoining Tamil areas of the island and close to Rameshwaram

Sri Lankan government has received several proposals to develop natural gas found in the block M2 of the Mannar basin in the Bay of Bengal adjoining the Tamil areas of the island and a contract would probably be signed at the end of this year, according to an official of the, Director Benefits at the Petroleum Resources Development Secretariat, the Sri Lankan media reported.

Studies conducted so far had shown that there was a potential reservoir capacity in excess of one trillion cubic feet in two sites, Dorado and Barracuda, of the M2 Block, he said.

"Of the two discoveries, 300 billion cubic feet of natural gas is situated within the smaller, simpler, Dorado reservoir, which lends itself to early production after appraisal. The larger Barracuda discovery that is in excess of 500 billion cubic feet needs further appraisal built with extensive reservoir studies and evaluation for optimal production design."

The spokesman said that the Ceylon Electricity Board (CEB) is planning to set up a 600 MW power plant to run on natural gas and if that works out they can pump this directly into the systems and generate power.  The extraction project would take at least three years to fructify.

Once Sri Lanka was able to secure natural gas from the Mannar basin situated near Rameshwaram , it would be the most cost effective and secure source of energy for Sri Lanka.

"Our plan is to have a balanced energy mix. We want to generate around 20% of energy using natural gas in the next 20 years. That is why we have put some emphasis on the building natural gas power stations."

Last week CEB Engineers Union (CEBEU) said a powerful UNP Minister was pressuring the government to sign an agreement with private investors from Japan and India to build an LNG terminal and to purchase 2.7 million tons of liquid gas per year, for a period of 20 years. The project the union contended would be 1,000 times worse than the disastrous hedging agreement signed by the Rajapaksa administration with Chinese entities.

"If we are going to extract natural gas from Mannar in a few years why are we signing a deal to purchase LNG from India and Japan?"  the union spokesman said.

 

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