Proposals for new power plants: With or without pollution?

By Dr. Janaka Ratnasiri-May 2, 2016, 7:50 pm 

Continued from yesterday

Discrepancies in CEB estimates

One of the key components in the infrastructure required to import LNG is the terminal to be built at the jetty where the LNG carrier is berthed. The jetty has to be at least 16 m deep to accommodate large LNG carriers and there has to be cryogenic tanks built on the jetty itself into which the liquefied gas could be transferred through a solid arm extended from the carrier. Alongside the LNG storage tank, a facility to covert the liquid into a gas has to be built with sufficient capacity, with send-off terminals to which pipelines could be connected which has been the traditional method of transferring the gas to a consumer. Such terminals are costly, and according to the World LNG Report 2015, published by International Gas Union, the costs are likely to be about USD 300 per tonne of throughput.

In the computation made by CEB for the LNG case, it has added the terminal cost to the power plant cost, which is not the correct practice. What is normally done is to amortize the cost of the terminal into an annual expenditure per unit amount of gas delivered expressed in million British thermal units (MBtu) and add that value to the cost of the gas, which in this case is USD 0.8 per MBtu. Furthermore, CEB has used an outdated value of USD 12.63 per MBtu for the cost of the gas which has come down drastically in recent years. According to a LNG supply contract India has entered into with Qatar last December, the price negotiated was USD 6-7 per MBtu. Hence, a price of USD 6.5 per MBtu was assumed, on the understanding that the Government of Sri Lanka could enter into a similar contract with Qatar Government directly.

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