The power minister announced on Thursday that China’s Sinopec, the world’s largest refiner, is set to commence work on a refinery in Sri Lanka by June, marking a significant step forward in a project earmarked as the largest investment in the crisis-ridden island nation.
Sri Lanka is actively seeking investment to stabilize its economy and foster growth following a financial crisis triggered by a severe dollar shortage in 2022, which resulted in a 2.3% contraction of the economy last year.
Officials from Sinopec Overseas Investment Holding are currently in Colombo for discussions with Sri Lankan authorities.
“The officials indicated that the management of Sinopec has decided to double the capacity of the refinery from the original proposal,” wrote the minister, Kanchana Wijesekera, on the social media platform X. “They intend to sign the agreements for the project and commence work by June 2024.”
Sri Lanka’s cabinet greenlit the project in November, with Wijesekera previously estimating the investment at $4.5 billion.
China stands as Sri Lanka’s largest bilateral lender, with its companies actively involved in constructing highways, ports, and other infrastructure across the island nation situated off the southern coast of India.
Sinopec’s investment, as one of the leading producers of petrochemicals, reflects its strategic move to expand beyond China, evident in its acquisition of refinery assets in Saudi Arabia and involvement in petrochemicals production in Russia.
Notably, Sri Lanka’s sole refinery, located at Sapugaskanda in the western region, was constructed by Iran in 1969 and has a daily crude processing capacity of 38,000 barrels.
Source: Reuters
