Sri Lanka is seeking investors to develop the Sapugaskanda oil refinery, which includes the establishment of a new refinery within the same premises.
The Government said that although the Ceylon Petroleum Corporation has made various efforts to modernize and upgrade the Sapugaskanda oil refinery both quantitatively and qualitatively to fulfill the demand of the market, all those efforts have not been successful.
Even though cabinet approval had been granted to establish the Sapugaskanda oil refinery as a public enterprise separate from the Ceylon Petroleum Corporation.
CPC is to identify an appropriate strategic investment partner and to take necessary steps after investigation of the possibility for the establishment of a new oil refinery in the Trincomalee area for that purpose, no action has been taken in that respect so far.
Under the policy framework relevant to the energy of the present government, the modernization of the existing refinery or construction of a new refinery has been identified as a priority function.
Approval had been granted by the board of directors of the Ceylon Petroleum Corporation to call for expressions of interest to identify a suitable investment partner based on the feasibility study conducted in the year 2022.
Accordingly, the Cabinet of Ministers has approved a proposal presented by the Minister of Power and Energy to develop the Sapugaskanda oil refinery and call for expressions of interest for the identification and selection of suitable financial suppliers/investors.
This is for the implementation of the project for the establishment of a new refinery within the same premises with a capacity of 100,000 barrels per day on the basis of an operation and transfer (BOT) system.
The rationale behind the move stems from the necessity of a ‘critical investment’ to modernise and upgrade the ageing infrastructure of the refinery. The aim is to ensure its operational efficiency and viability for at least another 25 years,” the Government Information Department noted.
Under the Ceylon Petroleum Corporation (CPC) restructuring plan, the CPC-owned refinery will be set up as a separate Government-owned and operated entity to attract and raise investments with the aim of improving fuel quality, efficiency, capacity, and reducing costs.
The restructuring plan includes revising the currently approved cadre and salary structure of the CPC while digital platforms will be introduced for multiple functions and service
The government’s aim is to get rid of the country’s only oil refinery with a capacity to supply 100percent of the country’s kerosene requirement, 50 percent of the aviation fuel requirement, and100 percent of the naphtha requirement.,
It was used to produce 30 percent of the diesel requirement, 14percent of the petrol requirement, 7-8percent of the gas requirement, and 75-100percent of the furnace oil requirement.
Initially designed to process 38,000 barrels of crude oil, the refinery currently has a capacity of refining about 50,000 barrels per day.
Sapugaskanda Refinery was built by Iran under the guidance of the Ceylon Petroleum Corporation (CPC) in August, 1969.
A senior engineer of the CPC said that the closure of the Sapugaskanda Oil Refinery would cost the country an additional sum of US$ 1.1 million a day to meet its crude oil requirement.He further claimed “
The refinery has been shut down on several occasions and it has cost a lot of money to resume its operations. This was a national crime, he added
