Sri Lanka 9Commonwealth) _ According to Power and Energy Minister Kanchana Wijesekera, Sri Lanka will likely approve an offer from Chinese state refiner Sinopec for the construction of a $4.5 billion refinery on Monday.
Sri Lanka, which is attempting to emerge from its worst economic crisis in more than 70 years, is in desperate need of new investment and local fuel supply. Sinopec’s investment of at least $4.5 billion will increase in value as they make expansions, but they must first come and sign the deal before we can disclose any further specifics, according to Wijesekera.
The investment would be a watershed moment for Sinopec, the world’s largest refinery by capacity and one of the world’s leading petrochemical producers. It has Saudi refinery assets as well as Russian petrochemical manufacturing.
According to Chinese official media, the Sri Lanka investment follows the state-run China Merchant Port Holdings’ 99-year lease at Hambantota port and a $392 million contract to establish a logistics and storage center in Colombo port.
Experts believe this fits with Beijing’s exuberant Belt and Road Initiative, which is marketed as resurrecting the old Silk Road to strengthen global trade infrastructure. After receiving formal clearance, Sinopec will begin basic engineering design, including finalizing the scale of the refinery and technological specifications, a senior company official told Reuters last month.
The investment will complement Sinopec’s newly launched gasoline retailing operation, making it the third multinational corporation with a presence in Sri Lanka, with a license to operate 150 petrol stations. The Sri Lankan government shortlisted Sinopec and commodities trader Vitol to compete for the refinery in August. According to the Sinopec source, Vitol later pulled out.
According to experts, the refinery may target markets other than Sri Lanka, where domestic fuel consumption is low, and may leverage its cooperation with China Merchants Port to increase bunker fuel supplies at Hambantota, a deep-sea port near key shipping routes between Europe and Asia.
According to another Sinopec official, the fuel oil division, which manages the retail operation there, began delivering marine bunker fuel at Hambantota in 2019. In 1969, Iran built Sri Lanka’s sole refinery in Sapugaskanda in the country’s west. The refinery has a capacity of 38,000 barrels of oil per day.
Interocean Lubricants (Pvt) Ltd., founded in 2008, is Sinopec’s exclusive distributor in Sri Lanka, making Sinopec Lubricants available through more than 1,500 dealer networks across the nation. Completed and packed Sinopec Lubricants are manufactured in China and Singapore. Engine oils, gear oils, hydraulic oils, greases, synthetic technology oils, automatic transmission oils, and marine oils are among the various products available.
Sinopec is a globally recognized brand in the field of world-class lubricants made using high-quality base oils and cutting-edge technology. It is worth noting that Sinopec has been producing excellent grade lubricants that satisfy world class standards for over 15 years.
The Sri Lankan government granted private enterprises from oil-producing nation’s access to gasoline imports and retail marketplaces. Furthermore, the Petroleum Products (Special Provisions) Bill was adopted, allowing new providers to enter the market as importers, wholesalers, and retail operators for petroleum products.
Sinopec is one of three businesses selected by the Cabinet of Ministers to begin operations in China. United Petroleum of Australia and RM Parks of the United States, in conjunction with Shell, are the remaining companies. Sinopec has been awarded a license to operate 150 service stations in Sri Lanka for the next 20 years, as well as the ability to invest in 50 additional locations.
