The government is in discussion with four foreign parties to build a US $ 2 billion new oil refinery in Sapugaskanda, Petroleum Resources Development Minister Arjuna Ranatunga said, yesterday.

“We are looking to build a new refinery in Sapugaskanda. There are already four proposals and another party is coming to meet me to discuss their proposal today,” he said. 

Ranatunga said that the ministry is looking to set up a refinery, which has the capacity to produce 110,000-125,000 barrels per day (bpd). The minister noted that the investment proposals are from Bahrain, the UAE, South Korea and China and the ministry officials are currently evaluating the proposals. 

However, he said that the evaluation process of the proposals would require sometime as feasibility studies, development proposals, etc. need to be carefully evaluated. 

Ranatunga emphasised that the selection of the developer would largely depend on how these firms would finance the project. 

Sri Lanka’s sole oil refinery has a capacity of 50,000 bpd, accounting for 30 percent of the fuel requirement. 

However, the refinery is only capable of refining Iranian light crude.