China Petroleum and Chemical Corp called Sinopec Corp, has set up a fuel oil company in Sri Lanka to supply fuel to ships along a major maritime route.
The new entity, Fuel Oil Sri Lanka Co Ltd, has been registered in Hambantota according to a report on the website of Sinopec Group, parent of Sinopec Corp.
Fuel oil is a refined product mostly used as bunker fuel for ships and is also burned in power stations.
The move marks the latest investment in Sri Lanka by China, which sees the South Asian island nation as a pivotal part of its Belt and Road Initiative infrastructure plan.
Sinopec stressed the strategic location of Hambantota port on the Indian Ocean along a key shipping route between the Suez Canal and the Malacca Strait, which is transited by two-thirds of global oil shipments. The market to supply fuel to ships had “huge” potential, it said.
In March, India’s Accord Group and Oman’s Ministry of Oil and Gas signed a $3.85 billion deal to build a 200,000 barrel-per-day oil refinery near Hambantota port, in the biggest single pledge of foreign direct investment ever made in Sri Lanka.
China Merchants Port Holdings, China Harbour Engineering Corp and other Chinese companies are investors in the port and industrial zone.
Sinopec has set a company-wide target of 10 million tonnes of production capacity by 2020 to supply low-sulfur bunker fuels that meet the cleaner emission standards set by the International Maritime Organization (IMO)
The Hambantota International Port (HIP) recently awarded a tender to Sinopec Fuel Oil Sales Co. Limited for oil trading works and the operation and maintenance of their oil tank terminal along with associated facilities.
Bunkering being an important part of the marine services portfolio offered by Hambantota International Port (HIP), the oil tank terminal in partnership with Sinopec Fuel Oil Sales Co. Limited will provide high grades of marine fuels compliant with the IMO 2020 Low Sulphur Rule and other ancillary facilities to marine liners calling at the Hambantota Port.
“With the capability of the company as the largest oil product supplier in China, it will start the production and supply of low Sulphur fuel (LSFO) and MGO.
(LI)