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Largest
foreign investment approved
By
Ann Nicholas
The single largest foreign
investment into the country amounting to US$ 1.6 billion received
cabinet approval last Wednesday. A consortium led by Chinese based
SINOPEC Holdings plans to construct an oil refinery in Hambantota.
According to sources at the Southern Region Development
Ministry, the refinery will have a capacity of 165,000 barrels per day
with a tank farm for storage of both crude oil and finished products.
It is expected to refine around eight million metric tones of
crude oil annually. It will also have a dedicated oil terminal with
facilities such as one 300,000 DWT SPBM and seabed pipeline, two oil
product berths of 5,000 and 50,000 DWT and approach bridge, one
working board quay and one breakwater including other supporting
facilities.
A combined cycle power plant will be integrated into the
refinery with an expected capacity of 750 MW and a total annual output
of 5,270 Gwh of which 5000 Gwh is to be sold to the Ceylon Electricity
Board (CEB).
This project, which will come under the Board of Investment (BOI),
is expected to be a 100% foreign investment.
Southern Region Development Minister, Ananda Kularatne said
that this project would be beneficial in the long-term to the southern
region since it will result in massive infrastructure development.
Commenting on the environmental clearances he stated that the
Environmental Impact Assessment (EIA) reports are yet to be finalised
and will be finalised within the next two or three months after which
the project will start.
Commenting on the plans to sell the extra power expected to
be generated to the CEB, he said that this would be subject to the
signing of a power sale/purchase agreement between the two parties.
Power and Energy Deputy Minister, Sagala Ratnayake commenting
on the proposed power plant said that the power generation would be a
by product of the oil refinery project. He noted that this project was
under negotiation and awaiting approval for a long time. He expressed
confidence in the project and called it “credit worthy.”
Speaking about the delay in the project receiving approval,
he said this may have been due to the initial misconception that there
was over capacity in oil refineries in the world. He went on to say
that in reality there existed under capacity and added that especially
in the South Asian region, there is a lot of potential for such
projects. He said that this BOI approved project would be solely
export oriented.
Speaking to The Sunday Leader, Chairman, BOI, Arjunna
Mahendran said that feasibility studies are expected to be finalised
early next year and that once these studies are completed, it would
take at least another four to five years for the construction of the
project considering its size.
He pointed out that there is still “a long way to go” but
expressed confidence in the implementation of the project that will
result in the development of the southern region.
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