Sri Lanka Starts Work on Oil Refinery
04.01.2019 By Greta Talmaci - NEWS

April 1, 2019 [Malaysian Reserve] – Sri Lanka began construction yesterday of a nearly US$4 billion (RM16.26 billion) oil refinery it hopes will revive foreign interest in its shipping facilities after Beijing’s takeover of a nearby port spooked international investors.

 

Prime Minister (PM) Ranil Wickremesinghe (picture) said Hambantota, a district in Sri Lanka’s south which lies on one of the world’s busiest shipping lanes, would become a global investment hub with the addition of the oil refinery and storage complex.

The US$3.85 billion project is the single largest foreign investment in Sri Lanka’s history. It is jointly funded by Oman and Singapore-registered Silver Park International Pte Ltd, a company owned by an Indian business family.

The oil facility is near the port of Hambantota, which was controversially leased to a Chinese state-owned firm in 2017 for 99 years after Sri Lanka failed to service a loan from Beijing. The circumstances surrounding China’s acquisition of the port generated concern in neighbouring India and beyond over Beijing’s expanding presence in the Indian Ocean.

But the government pointed to this new line of cash pouring into the region as proof foreign investors were not deterred by that experience.

“The interest shown by the Oman government, the interest shown by many other investors from other parts of the world shows that Hambantota will become a truly international investment zone,” the PM said.

Wickremesinghe also said he hoped to strike a deal within three months with Indian airport authorities to revive a US$210 million airport in Hambantota dubbed the “world’s emptiest” international terminal for its lack of flights.

The oil storage tanks are expected to be completed within two years, while the refinery is due to be up and running by 2023.

Once fully operational the refinery — the second in Sri Lanka — is to export nine million tonnes of petroleum products annually.

The Indian Ocean island nation does not have oil of its own. It refines imported crude, but the existing refinery is unable to meet demand.

The Hambantota port was built by former president Mahinda Rajapakse.

Unable to service the loan, the Wickremesinghe government in 2017 leased the Chinese-built port to a Beijing company for US$1.12 billion.

This stoked controversy, with Beijing rejecting suggestions it ensnared Sri Lanka in a “debt trap” to acquire the port.

—————————-

Get a 3-Days Free Trial with Full Access to Insightful Data on 4,900 Tank Terminals.

IKAV, VTTI Buy Majority Stake in Italy's Biggest LNG Terminal
03.28.2024 - NEWS
March 28, 2024 [Reuters]-Dutch infrastructure group VTTI and German asset manager IKAV have teame... Read More
Neste Oyj : Supplying Sustainable Aviation Fuel to Emirates for Flights From Amsterdam Airport Schiphol
03.28.2024 - NEWS
March 28, 2024 [Market Screener]-Neste has started supplying sustainable aviation fuel (SAF) to E... Read More
France Gets EC Nod for EUR-900m Biomass, Hydrogen State Aid Plan
03.28.2024 - NEWS
March 28, 2024 [Renewables Now]-The European Commission (EC) has approved France’s plan for a E... Read More
A Milestone Moment Port Arthur LNG Celebrates One Year of Achievement
03.28.2024 - NEWS
March 28, 2024 [Storage Terminal Magazine]-The groundbreaking ceremony for the Port Arthur LNG Ph... Read More