• To be located next to existing refinery in Sapugaskanda
• Feasibility study expected to be completed in Oct.
• To cost an estimated US$ 2.5 to 3 billion; to be completed as PPP 

By Nishel Fernando
The Ceylon Petroleum Corporation (CPC) plans to float international tenders for the construction of the proposed new oil refinery adjoining its existing oil refinery in Sapugaskanda as a public-private partnership (PPP) project either on build–operate-transfer (BOT) or build–own–operate–transfer (BOOT) basis in the fourth quarter of this year.

A feasibility study on the proposed refinery, which is estimated to cost US$ 2.5 – 3 billion is currently underway by an internationally reputed agency and is on track for completion in October.

“They are looking at the feasibility of downstream market as well as backward and forward integration on BOT or BOOT basis. The feasibility report is due in October,” CPC, Managing Director, Buddhika Madihahewa told 
Mirror Business. 

Following the completion of the feasibility study, CPC expects to float international tenders for the proposed refinery, ending CPC’s monopoly in refining crude oil. The Ministry of Energy has already announced plans to amend the Petroleum Corporation Act No. 28 of 1961 in order to grant authority to the chosen investor of the proposed refinery to refine oil. 

The Cabinet of Ministers has already granted approval to the Ministry to make amendments to certain provisions in the said Act. CPC currently operates 38,000 bpd refinery built in late 1960s. The capacity of the proposed refinery is planned at 100,000 bpd. Madihahewa expects the project construction to be completed within a time frame of 
2-3 years.

CPC recently cleared several issues pertaining to the earmarked land for the project, and finalised that the new refinery would be set up in a land block adjoining the existing oil refinery at Sapugaskanda.

According to the Energy Ministry, the project is estimated to save up to US$ 300 million per annum.