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New Fortress Energy (NFE) has reached an agreement to build a new offshore liquefied natural gas (LNG) receiving, storage and regasification terminal in Sri Lanka.

A related framework agreement has been signed with the Government of Sri Lanka.

Planned to be located off the coast of Colombo, the new terminal will be equipped to supply gas to power plants in the country, which are primarily located in the Kerawalapitiya Power Complex.

The installed capacity at the power complex is expected to grow from the current 300MW to more than 1,000MW by 2025.

New Fortress has agreed to supply natural gas to the existing 300MW Yugadanavi Power Plant.

In addition, the firm is negotiating with the government to acquire a 40% stake in the company that owns the power plant.

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By GlobalData

New Fortress Energy chairman and CEO Wes Edens said that the firm supports the country’s transition to clean, reliable and affordable energy.

Edens added: “This investment in Sri Lanka’s first LNG terminal will advance the country’s clean energy transition and support sustainable development for this vibrant economy. This is the first of what we think will be a number of investments in power and infrastructure in the country.”

New Fortress Energy also said that the new offshore terminal will for the first time introduce natural gas to the country. It is said to assist the country in transitioning to lower-carbon energy sources.

Under the agreement, the government will help in securing permits and entitlements for New Fortress to construct the LNG terminal.

The new terminal, which is expected to commence operations by the second half of 2022, represents the company’s first of its kind in Asia.