By: Staff Writer
Colombo (LNW): Sri Lanka will likely approve on Monday a proposal from Chinese state refiner Sinopec to build a $4.5-billion-dollar refinery, the power and energy minister said on Saturday.
“It’s on the agenda for Monday. Once the cabinet gives approval, we will invite them to sign the agreement,”headed.
Sri Lanka, trying to recover from its worst economic crisis in more than 70 years, is hungry for new investment and local fuel supplies.
Sinopec’s investment of at least $4.5 billion “will go up in value as and when they do additions, but they must first come and sign the agreement for us to give any more details,” Wijesekera said.
The tender for Sri Lanka’s proposed $4 billion oil refinery in the investment zone near Chinese built Hambantota port will be awarded soon, he added.
China’s Sinopec and Vitol Asia based in Singapore are the two firms shortlisted out of seven companies that responded to an expression of interest early this year.
“We have issued the RFPs (request for proposal) for the two firms shortlisted. They have submitted the RFPs and now we are in the process of reviewing the RFPs,” State Power & Energy Minister D V Chanaka said
Sovereign debt defaulted Sri Lanka has been struggling to attract foreign inflows. The refinery is part of a strategy to attract more foreign investments into the bankrupted nation.
Government sources say the refinery is likely to be awarded to Sinopec which has already started retail fuel supply and is competing with LIOC, a fully-owned subsidiary of Indian Oil Corporation.
Sri Lanka received seven responses to an expression of interest (EOI) to build the export-oriented oil refinery in Hambantota, in the island’s Southern coast of Hambantota and next to a Chinese-owned port.
Grant & Shearer Ltd from Nigeria, Sinopec from China, Petrichor Capital from Malaysia, Vitol Group from Singapore, Martin Tejarat from Iran, Dandeniya Engineering Sales and Service Syndicate, a local-based company and Sri Lanka’s Harree Management with UAE’s Marka Invest submitted their expression of interest early thi year
For Sinopec, the world’s top refinery by capacity and one of the largest petrochemical makers, the investment would mark a breakthrough in a long effort to expand beyond China’s borders. It owns refinery assets in Saudi Arabia and petrochemicals production in Russia.
The Sri Lanka investment follows state-run China Merchant Port Holdings’ 99-year lease at Hambantota port and a $392 million deal to build a logistics and storage hub in Colombo port, Chinese state media reported in April.
