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Sapugaskanda upgrade project suspended; alternative at H’tota
View(s):By Damith Wickremasekara
A US$ 2 billion project to upgrade the Sapugaskanda oil refinery has been shelved, Finance Minister Ravi Karunanayake said.
Petroleum Resources Development Minister Chandima Weerakkody had submitted the proposal prepared by experts to the Cabinet Committee on Economic Management. Mr. Karunanayake told the Sunday Times the proposal was turned down as fundraising measures were not viable and a more viable one would be submitted later.
The Petroleum Ministry had proposed the formation of a limited company, as a fully owned subsidiary of the Ceylon Petroleum Corporation, to raise the required funds. Mr. Weerakkody said the proposal was put forward in a manner it could be carried out without a sovereign or Treasury guarantee.
“We were confident that the required funds could be raised for the project and there would be sufficient space to expand the Sapugaskanda refinery,” he said. The Petroleum Minister said he was told that there were better proposals received by Development Strategies and International Trade Minister Malik Samarawickrema.
According to an official of this ministry, one of the proposals under consideration is the setting up of a refinery in Hambantota with Chinese investment to refine 100,000 barrels a day. He said, however, the main objective of the proposed Hambantota refinery was to re-export the refined oil.