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New oil refinery for Hambantota

Uditha Kumarasinghe, Rajmi Manatunga and Thushara Kaluarachchi

COLOMBO: A new oil refinery is to be set up in Hambantota for supplying refined oil to the global market.

The refinery with a capacity of 100,000 oil barrels per day is also expected to provide oil for domestic consumption when the existing Sapugaskanda refinery is unable to meet the demand.

Cabinet spokesman Minister Anura Priyadarshana Yapa said the Government has permitted the United Arab Emirates (UAE) based Star Metro Energy to set up the new refinery at a cost of Rs 1.5 billion.

“The Cabinet Sub Committee on Investment Facilitation has recommended approval for the refinery. It was also decided to give the UAE company two years to commence operations,” he said.

The capacity of the existing oil refinery at Sapugaskanda is limited to 50,000 barrels of crude oil per day. Out of the total oil requirement of Sri Lanka only 60 per cent is refined at the Sapugaskanda refinery while the remaining 40 per cent is imported.

Along with the decision to set up the new refinery, the Cabinet also decided to revoke approvals previously granted to proposals for setting up new oil refineries, if such proposals have not been implemented within two years from the date of approval.

According to the Petroleum Resources Development Minister A.H.M. Fowzie, two such proposals to set up new refineries have so far received Cabinet approval.

“If they do not take steps to set up the refineries within two years the approval will be deemed to have been cancelled,” Fowzie said.

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