Shell Gas, the largest player in the Sri Lanka’s gas industry at one point, is set to return to the country’s market by edging out Litro Gas, the state run gas company.
A delegation from Shell is scheduled to hold discussions with Lankan authorities on Monday over the comeback bid, Colombo Telegraph is now in a position to reveal.
However, it learnt that Shell has got the green light to re-enter into Lankan market without a proper tender procedure. This year, 34 companies had sent tender applications to be Sri Lanka’s gas supplier. However, Shell has managed to circumvent the tender process and has now become the front-runner for the bid.
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.
Shell’s comeback bid is likely to jeopardize the operations of the state-run Litro Gas, industry sources told Colomb Telegraph on Saturday.