Sri Lanka is set to embark on a transformative energy project as China’s Sinopec prepares to commence construction of a $3.7 billion oil refinery near the Hambantota Port. Scheduled to begin operations in 2025, this state-of-the-art facility aims to process 200,000 barrels of crude oil daily, significantly enhancing Sri Lanka’s refining capacity and reducing its reliance on imported refined petroleum products.
The project is expected to generate substantial economic benefits, including:
- Job Creation: Thousands of direct and indirect employment opportunities during and post-construction.
- Energy Security: A reduction in fuel import dependency, contributing to improved energy security.
- Economic Growth: Increased foreign exchange earnings through refined product exports.
However, the initiative faces challenges, particularly regarding Sinopec’s request to expand its local fuel sales quota from 20% to 40%. This proposal is under review by Sri Lankan authorities and could impact the project’s feasibility and long-term benefits.
In parallel, Sri Lanka plans to invest $3 billion to expand its state-run refinery in Colombo, aiming to increase its output from 38,000 to 150,000 barrels per day. This dual approach underscores the nation’s commitment to bolstering its energy infrastructure and achieving greater self-sufficiency in fuel production.
