March 29, 2024 [Reuters]-The world’s largest refiner, China’s Sinopec plans to start work on a refinery in Sri Lanka by June, the power minister said on Thursday, advancing a project earmarked as the biggest investment in the crisis-hit island nation.

Sri Lanka is looking to attract investment in the battle to stabilise its economy and return to growth following a financial crisis caused by a severe shortfall of dollars in 2022 that led the economy to contract 2.3% last year.

Officials of Sinopec Overseas Investment Holding are visiting Colombo for talks with Sri Lankan authorities.

“The officials indicated that the management of Sinopec has decided to double the capacity of the refinery from the original proposal,” the minister, Kanchana Wijesekera, wrote on social media platform X.

“They intend to sign the agreements for the project and commence work by June 2024.”

Sri Lanka’s cabinet approved the project in November, an investment that Wijesekera has earlier tagged at $4.5 billion.

China is Sri Lanka’s biggest two-way lender, with its companies building highways, sea and air ports and other infrastructure on the island off India’s southern coast.

The investment by Sinopec, one of the largest producers of petrochemicals, is part of an effort to expand beyond China, in which it has acquired refinery assets in Saudi Arabia and petrochemicals production in Russia.

Iran built Sri Lanka’s only refinery at Sapugaskanda in the western region in 1969. It can process 38,000 barrels of crude a day.

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