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Govt. calls tenders to build second refinery of 100,000 bpd
View(s):Tenders have been called for feasibility studies to build Sri Lanka’s second oil refinery with a capacity to refine 100,000 barrels per day, Minister of Petroleum Resources Development, Arjuna Ranatunga told the Sunday Times. The present oil refinery refines about 42,000 bpd. The Ministry intends to refurbish the refinery to operate at its full capacity of 50,000 bpd, while also building the second refinery, the Minister elaborated.
Already, firms from Iran, Russia and China have expressed interest, Mr Ranatunga revealed. The project, however, is expected to cost up to US$ 2 billion. “We don’t have the funds to build a new refinery and hence, we are negotiating with the parties interested in conducting feasibility studies to build the refinery,” he added. “The firms have proposed they build the refinery and for the Ceylon Petroleum Corporation (CPC) to purchase crude oil exclusively from them, while sharing profits from the refinery,” Minister Ranatunga further said.
“If we start now we can finish building the refinery in three years,” he said. “The location of the new refinery is immaterial,” he maintained, but added the Govt was insistent that the CPC have a majority stake in the refinery. “Our condition is that majority control must be with the CPC.”
Several such proposals were also explored to build an oil refinery in a port while he was the Minister of Ports and Shipping, the Minister revealed. “But those companies wanted to export oil to other markets and not to Sri Lanka, so we rejected them.”
He pointed out that the successful construction of such a refinery would enable the Govt to keep crude oil prices steady for some years, stating he intends to present the feasibility study selected after the tender process, to the President. “We can then start on it very soon,” he said.