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Sri Lanka signs $3.7 bn oil refinery project with China’s Sinopec

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A Sinopec oil refinery in Pudong district, Shanghai, China. Photo: Kevin Lee/Getty Images
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Sinopec has agreed to invest USD 3.7 billion to construct a “state-of-the-art oil refinery” with a capacity of 200,000 barrels in the southern Hambantota region, according to the Sri Lanka president’s media division.

“During President Anura Kumara Dissanayake’s four-day state visit to China, Sri Lanka marked a significant milestone by securing the largest foreign direct investment to date,” it said.

A “substantial portion” of the refinery’s output would be earmarked for export as part of efforts to shore up Sri Lanka’s foreign exchange earnings, a statement said.

“This major investment from China is expected to bolster Sri Lanka’s economic growth while uplifting the livelihoods of low-income communities in the Hambantota area,” it added.

Deal initiated under Wickremesinghe administration

Kanchana Wijesekara, Power and Energy Minister under the Ranil Wickremesinghe-led government said that the Cabinet of Ministers approved awarding the contract to Sinopec to forge an agreement for the establishment of a petroleum refinery and associated product processing centre in Hambantota on November 27, 2023.

The proposed refinery project was expected to see an investment of a minimum of USD 4.5 billion to be built in the Industrial Zone at the Hambantota Port.

“They intend to sign the agreements for the project and commence work by June 2024,” the Minister noted on ‘X’ on 28 March 2024.

(With inputs from AFP)

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