Sri Lanka's biggest investment since crisis will be a Chinese refinery

Sri Lanka has approved a $4.5 billion refinery project proposed by China’s Sinopec, as announced by the country’s energy minister. This approval marks the single largest investment in Sri Lanka since it faced a severe economic crisis last year. With the cabinet’s endorsement, the state-owned refiner is now authorised to conclude project details and proceed to sign an agreement with the government. The construction of the export-oriented refinery is set to take place in Hambantota, located in the southern part of the country. The cabinet approval cleared the state-owned refiner to finalise project details and sign an agreement with the government before it starts building the export-oriented refinery at Hambantota in the south of the country. “Cabinet approval was granted today to award the contract to China Petroleum & Chemical Corporation (SINOPEC) of China,” Minister Kanchana Wijesekera wrote on social media platform X.

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.

— Kanchana Wijesekera (@kanchana_wij) November 27, 2023

China is Sri Lanka’s biggest bilateral lender and its companies have built highways, sea and air ports and other infrastructure projects on the island off India’s southern coast. For Sinopec, the world’s top refiner by capacity and one of the largest petrochemicals producers, the investment would mark a breakthrough in a long effort to expand beyond China’s borders. The company also owns refinery assets in Saudi Arabia and petrochemicals production in Russia. Iran built Sri Lanka’s only refinery at Sapugaskanda in the west of the country in 1969. The refinery can process 38,000 barrels of oil per day. With inputs from Reuters.