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Whopping loan sought to set up new oil refinery
Sapugaskanda can refine mostly Iranian crude now hit by sanctions
The Government will seek US $ 2.5 billion or Rs.320 billion through another loan to set up a new oil refinery in Sri Lanka, Petroleum Industries Minister Anura Priyadarshana Yapa declared yesterday. “This will help us save monies spent on imported refined fuel,” he told the Sunday Times. He said that the only refinery at Sapugaskanda is not suitable to refine some varieties of crude oil. Besides that, its output has dropped since crude procurements from Iran were pruned down after sanctions were imposed by the United States.
Mr. Yapa said international companies in China, South Korea, Italy, Turkey and United States are among the countries with which the Government was now exploring the possibility of setting up a refinery. “We are looking at a facility where we could refine about 100,00 barrels per day and it should have the facility to refine oil products from over 20 countries,” he said.
Minister Yapa said that after the discussions are concluded Cabinet approval will be sought for the project to be completed in about one and half years. He said an estimated US $ 2.5 billion loan will be taken for the construction of the project. A senior Ministry official said that due to disadvantages in the Build Operate and Transfer (BOT) system it is hoped to opt for the loan for the project. He said the Word Bank was among those which the Government was hoping to obtain the loan.
Ceylon Petroleum Corporation (CPC) Managing Director Susantha Silva told the Sunday Times that the need for a new refinery had risen as the Sapugaskanda oil refinery was specifically prepared to refine crude oil products from Iran. He said currently the country is importing refined products due to the restrictions placed on imports from Iran.
Last month the Government approved a staggering Rs. 315 billion for a re-fleeting programme for SriLankan Airlines.
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