The Cabinet nod has been granted to draft a new Fossil Fuel Resource Development Act replacing the Fossil Fuel Resources Act No 26 of 2003, in order to establish a new legal framework for local fossil fuel including the natural gas industry as proposed in the National Policy on Natural Gas (NPNG).
Energy Minister Udaya Gammanpila on Monday presented the Cabinet a proposal to draft a new Act while highlighting shortcomings in the current Act in terms of interpreting the definitions, regulation, progress, and maintaining a national monitoring agency.
The Ministry of Energy published the National Policy on Natural Gas (NPNG) in the government gazette last October with the assistance of Petroleum Resources Development Secretariat (PRDS) followed by an extensive public consultation process.
The policy has been based on five key principles—ensuring energy security, minimisation of environmental, health and safety risks; optimal use of indigenous natural gas; enhanced private sector participation, adaptive development and optimisation of market structure for inclusive benefits.
As per the policy document, the Ministry of Energy would be the State entity in charge of policy direction, guidance, inter-agency coordination as well as overall supervision of policy implementation.
It has also been proposed to setup a National Gas Company as the Single Credible Entity (SCE) for handling all government economic transactions pertaining to natural gas, including private public partnership (PPP) ventures and technical and institutional assistance for policy implementation.
Further, PRDS proposed to regulate the up-stream natural gas industry activities while Public Utilities Commission of Sri Lanka was proposed to become the mid and down-stream gas market regulator.
In addition, Ceylon Petroleum Corporation (CPC) is expected to provide technical and institutional assistance for the implementation of NPNG.
The structural changes in legal, institutional, and the regulatory frameworks proposed in the NPNG are scheduled to incorporate within an 18-month period.
According to the Government Information Department, the industrial estate is expected to facilitate the commencement of a range of industries such as rubber, plastics, pharmaceutical and allied products, electrical and electronic appliances, packaging, value-added agro--products and recycling industries with a focus on apparel and allied products.
Further, it noted that the proposal was based on investor demand for such an industrial estate in the Western province to setup their manufacturing plants.
The Industries Minister has received such requests from around 150 investors. Therefore, the Ministry assured the Cabinet of Ministers on attracting investments worth of Rs.30 billion while generating 11,500 employment opportunities.