The agreement with Shell Gas company on the annual gas supply to the country is likely to be signed next week, authoritative sources told Colombo Telegraph.
The representatives of the company has already held several rounds of discussion with the Sri Lankan authorities over the agreement.
When contacted by Colombo Telegraph, a high profile official involved in the process said the Sri Lankan government is holding discussions with nearly five companies over the annual gas supply. “Shell is not the only stakeholder, ” he said.
However, reliable sources said Shell Gas Company, which pulled out of Sri Lanka’s market a few years ago, has already clinched the deal.
There are serious doubts whether the proper tender procedure was followed when awarding the tender to Shell Gas company.
Although some officials have suggested to postpone the signing of the agreement, certain stakeholders, including the Finance Ministry which come under Ravi Karunanayake, are exerting pressure on authorities to sign the agreement before August 17.
Shell had to pull out of Sri Lanka after the government bought back Royal Dutch Shell’s stake in the part privatized gas company, Shell Gas Lanka. Shell’s decision to sell followed long running quarrels with the Government over the price at which the company could sell gas in the country. The $63 million sale returns the LP gas business in Sri Lanka to 100% state ownership.
Former President Mahinda Rajapaksa’s government had been at loggerheads with the oil and gas giant over the price at which gas is sold: the government insisted gas be sold at less than international market prices.
Following the development, Litro gas was formed by the Sri Lankan government with Sri Lanka Insurance being its majority shareholder. Litro gas is presently the biggest player in the Lankan gas industry.