Sri Lanka has approved China Petroleum & Chemical Corporation (SINOPEC) to establish a new Petroleum Refinery in the island nation’s deep Southern Hambantota port, Power and Energy Minister Kanchana Wijesekera said.
“Cabinet approval was granted today to award the contract to China Petroleum & Chemical Corporation (SINOPEC) of China, to enter into an agreement to establish a new Petroleum Refinery & Associated Product Processing center in Hambantota,” Wijesekera said in his X (formerly Twitter) platform.
The Minister on Saturday said the government expects at least $4.5 billion investment in the new refinery which will cater into exports as well as local markets. Sinopec has already started fuel retailing in Sri Lanka, competing with Sri Lanka’s state-owned Ceylon Petroleum Corporation (Ceypetco) and Lanka IOC, a fully owned subsidiary of Indian Oil Corporation.
Though Sinopec and Vitol Asia based in Singapore were the two firms shortlisted out of seven companies that responded to an expression of interest early this year, Vitol withdrew its bid, government officials have said.
The move will strengthen China’s position in Sri Lanka where India and other developed countries are trying to win projects and have influence in the South Asian Island nation which is facing an unprecedented economic crisis.
Beijing already has a massive port in Hambantota on a 99-year lease and expects to establish an investment zone in 15,000 acre land.