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US company to modernise Sapugaskanda oil refinery
The Government is to award a multi-billion rupee contract to a United States-based company to modernise the Sapugaskanda oil refinery, a senior official said.
Petroleum Resources Ministry Secretary Sunil Hettiaarachchi told the Sunday Times the contract amounting to US$ 100 million (Rs 17 billion) would be awarded to Honeywell UOP, formerly known as UOP LLC or Universal Oil Products, a multi-national company.
He said the project was aimed at upgrading the machinery, enabling the Ceylon Petroleum Corporation to increase production at the refinery from the existing capacity of 50,000 barrels a day to 70,000.
The secretary said the company was selected after worldwide tenders were called and the US company was the only bidder. The company also had previous experience in designing the existing refinery at Sapugaskanda.
Cabinet approval for the project is expected to be sought in the next two weeks.
Under the three-year project due to begin later this year, the first year would be for designing and the next two years for construction.
Under the project, the main crude distiller column would be replaced increasing the refinery’s efficiency. The company would also modernise the petrol refinery to increase its capacity from 500 Mt to 1000 Mt.
Mr. Hettiaarachchi said the modernisation was expected to reduce the import of finished petroleum products from 70 to 50 percent. At present, only about 30 percent of Sri Lanka’s oil requirement is refined in the country.
The modernisation would also enable the refining of different types of crude oil. At present, only two types were being refined, he said.