The Government has decided to upgrade the decades-old Sapugaskanda oil refinery to produce a higher percentage of fuel needed by the local market and also plans to set up two more refineries in Hambantota and Trincomalee.
A project is to be initiated to enhance the existing capacity at Sapugaskanda Oil Refinery with the aim of doubling the capacity official sources said.
The Cabinet of Ministers has approved the proposal presented by the Minister of Energy Udaya Gammanpila to initiate a new feasibility study in order to determine the scope, technical, operational and financial feasibility of implementing this project
“The current capacity of the Ceylon Petroleum Corporation’s (CPC) refinery at Sapugaskanda is only 40,000 (bblspd) and the refinery meets only 25% of the local demand for refined petroleum products. The remaining 75% has to be imported, making a greater impact on foreign exchange."
"A feasibility study was conducted in 2010 for the renovation and expansion of the refinery to increase its capacity up to 100,000 (bblspd). Subsequent technological changes in the field have made it impossible to proceed on the results of the feasibility study,” it said.
The Government would expect to double the capacity of the Sapugaskanda oil refinery in the medium term, a senior official said adding that the 50-year-old facility refines imported crude oil to supply 35% of the energy demand of the nation.
He stressed the need of increasing the capacity to 80% in the medium term and expand to 100% in the future.
In addition he said the Government planned to build two refineries in Trincomalee, possibly near the existing oil tank farm and in Hambantota.
The Trincomalee oil tank farm consists of 99 tanks and only 15 of the tanks are currently in operation. Indian Oil Corporation Subsidiary Lanka IOC uses 15 tanks.
The previous administration also conducted a 35-day overhaul renovation program aimed at boosting efficiency of the facility. The renovation process commenced on 19 February 2018 and over 1,200 employees including engineers and mechanics joined the operation.
The foundation stone was laid for a $ 3.8 billion refinery project in Hambantota by the previous administration.
(LIN)