20 March 2019 09:01 am
The oil refinery will come into operation in four years and is expected to generate additional US $7 billion of exports per annum by exporting a minimum of 9 million metric tonnes of petroleum products per year.
“The investment made in Hambantota port is threefold, and this will be an opportunity for Sri Lanka to finally fully utilise the port which almost remained idle since it came into operation,” Development Strategies and International Trade Deputy Minister Nalin Bandara told reporters yesterday at the ministry premises in Colombo.
The refinery will have a capacity to refine 200,000 barrels of crude oil per day, which is significantly higher than the capacity of Sri Lanka’s only oil refinery located in Sapugaskanda with a capacity of 20,000 barrels per day.
According to the Technical Advisor to the Development Strategies and International Trade Ministry, Mangala Yapa, Singapore-based Silver Park International will have 70 percent stake in the joint venture, while the Ministry of Oil and Gas of Sultanate of Oman will hold 30 percent.
Though the project is targeted at 100 percent exports, Bandara noted that CPC and IOC could bid for refined petroleum products at competitive prices to supply to local consumers with low-priced refined petroleum products.
The first phase of the project is set to commence on March 24 at a ground breaking ceremony in the Mirijjawila Export Processing Zone where Prime Minister Ranil Wickremesinghe will be the chief guest.
BOI Director General, Champika Malalgoda said the joint venture will invest US$1.8 billion under phase one to construct the Oil Tank Farm, Pipeline system and other necessary infrastructure, that is to be completed within two years.
The oil tanks will have a capacity to store one million metric tonnes of crude oil and around 0.7 million metric tonnes of refined petroleum products, which will be imported and exported through Hambanthota Port.
The Board of Investment (BOI) is currently working on allocating another 385 acres of land from the Mahaweli Authority outside the zone, to set-up the oil refinery.
Yapa said the BOI will be initiating an Environmental Impact Assessment (EIA) and regulatory procedures to get necessary clearances for the oil refinery, which could be concluded in six months.
He noted that there could be a possibility for the oil refinery to supply bunker fuel to the Hambantota port in future, as the Chinese port operators are eying to develop the bunkering business in the port.
BOI estimates that the project will create 1,500 direct jobs once completed and another 750 jobs during the construction period, in addition to indirect employment opportunities. (Nishel Fernando)