FILE - Sri Lankan port workers hold a Chinese national flag to welcome Chinese research ship Yuan Wang 5, bristling with surveillance equipment, as it arrives in Hambantota International Port in Hambantota, Sri Lanka, on Aug. 16, 2022.

Govt looks to India in Trincomalee, turns to China in Hambantota in oil refinery push

 KELUM BANDARA   23 January 2025  Daily Mirror

Colombo, January 23 (Daily Mirror) - Hot on the heels of signing an agreement with China’s Sinopec for an oil refinery in Hambantota, the government is planning to establish a similar facility in Trincomalee with the help of India if willing, a Minister said yesterday.

During the visit of President Anura Kumara Dissanayake to China recently, the agreement was signed for an investment of US $ 3.7 billion with Sinopec which is a leading petroleum and petrochemical company in the world.

Delivering remarks to the press, Foreign Affairs Minister Vijitha Herath said yesterday that it would be an oil refinery project primarily meant for the export market, and a landmass of 500 acres adjacent to the Hambantota port would be earmarked for it.

Referring to the proposed multi- product petroleum pipeline between Sri Lanka and India, the Minister said the two sides had agreed to discuss such a project. However, he said the government is planning for an oil refinery in Trincomalee in eastern Sri Lanka, and will do it with India if it is ready for such cooperation. The United Arab Emirates (UAE) is also expected to play a role in this project, according to the joint statement.

Already, in the joint statement signed between India and Sri Lanka after the President’s last month visit to New Delhi, the development of Trincomalee Tank Farms as a regional energy and industrial hub has been envisaged.

The government has already decided to develop the Trincomalee oil tank farm through Trinco Petroleum Terminal Ltd which is a joint venture between Lanka Indian Oil Company and Ceylon Petroleum Corporation (CPC).

Out of 99 tanks in Trincomalee, 14 are run by LIOC. According to the agreement signed during the time of Mr. Udaya Gammanpila as the Subject Minister of the Gotabaya Rajapaksa government, the CPC is required to develop 35 tanks and the remaining 50 tanks jointly by the CPC and LIOC through this venture.

Energy Minister Kumara Jayakodi recently promised to press ahead with this project. 

Sri Lanka agrees with China's Sinopec to fast-track $3.7 billion refinery

COLOMBO, Sri Lanka , VOA— 

Sri Lanka's foreign minister said on Wednesday that the South Asian island nation had signed an agreement with Chinese state energy giant Sinopec to fast-track a proposed $3.7 billion oil refinery in its southern port city of Hambantota.

Sinopec and Sri Lanka will jointly decide the share of refined fuel that will be exported from the facility, Foreign Minister Vijitha Herath told reporters.

"This is one of the largest foreign investment projects Sri Lanka has received and we feel it will be important for us," Herath said.

"This refinery has been discussed between the two countries for many years and we are committed to taking it forward. We hope to break ground as soon as possible."

He declined to provide details on the planned capacity of the refinery.

A Sinopec representative in China did not respond immediately to a request for comment and its Sri Lanka office did not answer phone calls.

Sri Lanka is currently completely dependent on imported oil, which costs the cash-strapped country billions of dollars every year, though it does have some smaller refineries.

The country is looking to attract foreign investment to stabilize its economy which crumpled under a severe foreign exchange crisis in 2022. Sri Lanka posted a faster-than-expected rally after securing a $2.9 billion International Monetary Fund (IMF) program in 2023.

Sinopec and Sri Lanka will work to resolve land, tax and water issues within a month, Herath said, adding that Colombo expects the refinery to assist the Chinese-built Hambantota Port to function as a hub via bunkering services.

Last week, China and Sri Lanka signed 15 cooperation documents, including agreements on economic and technological development, when recently-elected Sri Lankan President Anura Kumara Dissanayake met China's President Xi Jinping in Beijing.

Dissanayake's visit to debt-ridden Sri Lanka's largest bilateral lender came after he first traveled to Beijing's regional rival India. Specifics of the deals signed between Sri Lanka and China were not disclosed at the signing ceremony.

Sinopec's effort to build a refinery in the Indian Ocean island puts it in direct competition with India's interests in expanding its role as an energy supplier to Sri Lanka.

Herath said Sri Lanka is continuing discussions with India on a proposed fuel pipeline between the two countries and is open to refinery proposals from India.⍐