Greenstat Hydrogen India, a subsidiary of Norwegian energy firm Greenstat, has signed an agreement with the Petroleum Development Authority of Sri Lanka to produce green hydrogen in Sri Lanka.

“The first pilot is expected to be commissioned in late 2023,” Greenstat Hydrogen India chairman Sturle Harald Pedersen told Argus. “We are conducting a comprehensive feasibility study and developing a roadmap for green hydrogen for Sri Lanka.”

The agreement likely marks the first time Sri Lanka has taken a step towards green hydrogen, with the government having set a target to achieve decarbonisation by 2050.

Sri Lanka has a lot of renewable energy such as offshore wind, which could potentially increase to a capacity of 73GW, that it can use to produce green hydrogen for domestic energy use, while its surplus wind power can be exported, said Pedersen, although a timeline for the rise in offshore wind capacity was not provided.

The Sri Lanka Sustainable Energy Authority puts the country’s onshore and offshore wind capacity from new projects at 2MW and 3-5MW, respectively. Commercially available wind turbines have reached 8MW of capacity, it said.

Sri Lanka can move from an energy deficit to a surplus if it develops large volumes of green hydrogen and ammonia within the next five years, Pederson added.

Sri Lanka has become more reliant on oil product imports since a foreign exchange crisis forced its sole 50,000 b/d Kelaniya refinery to close temporarily in November 2021, and again in January. It bought 40,000t (298,000 bl) of diesel from Indian state-owned refiner IOC last month to meet urgent fuel requirements.

Sri Lanka consumes around 110,000 b/d of oil products but produces only about 35,000 b/d at Kelaniya.