One year on, Sri Lanka’s largest FDI project yet to see the light of day

• Once constructed, the Sinopec refinery will have capacity to process 200,000 barrels of crude oil per day
• Lanka IOC, Sinopec, and RM Parks of the United States are involved in the sector at the moment
• The proposed US $ 3.7 billion investment by Sinopec is yet to see the light of day
• Sri Lanka has sought to tie up with India at the moment to develop Trincomalee as the energy hub.  
• Final decision expected to be taken soon by the Cabinet
• The MoU was signed during the visit of President Anura Kumara Dissanayake to China in January, last year

By Kelum Bandara

Despite the lapse of almost one year after signing the MoU (Memorandum of Understanding), the proposed US $ 3.7 billion investment by Sinopec is yet to see the light of day.  In January 2025, Chinese state-owned oil and gas giant China Petrochemical Corporation which is called Sinopec, entered into an agreement with the government to expedite the construction of a state-of-the-art $ 3.7 billion oil refinery in the investment zone near Hambantota International Port (HIP). The MoU was signed during the visit of President Anura Kumara Dissanayake to China in January, last year. It is the single largest investment. Once constructed, the Sinopec refinery, originally approved in 2023, will have capacity to process 200,000 barrels of crude oil per day.  

Later, the company sought amendments to the agreement allowing it, among others, increased access to the local market. Discussions are still ongoing in this regard.  
Asked about the current status of the project, an official who wished to remain anonymous said that the final decision would be taken by the Cabinet soon, but a timeline could not be set at this juncture.   
Sri Lanka has already opened its energy market to foreign companies. Lanka IOC, Sinopec, and RM Parks of the United States are involved in the sector at the moment. Sri Lanka has sought to tie up with India at the moment to develop Trincomalee as the energy hub.