Sri Lanka’s geographical locational advantage between Singapore and the Middle East, and the availability of a new deep-water Port in Hambantota make the island an optimum location for establishing export oriented Petroleum and other commodity processing facilities.
Promoting the country’s prospects as an investment destination against this backdrop, the BOI’s efforts have resulted in an investment proposal from Hambantota Oil Refinery PVT Ltd., an affiliate company to Sugih Energy International Pte Ltd, which is a privately-owned petroleum and coal trading company based in Singapore.
The proposed investment is to set up a petroleum refinery with a 420,000 barrels/day capacity for export markets at Hambantota, which amounts to approximately US$ 24 bn, over a period of 60 months, making this the largest Foreign Direct Investment (FDI) project to date.
The initial phase will involve the commissioning of the petroleum refinery with plans for development of a petrochemical complex in subsequent phases. Export revenue envisaged upon commissioning of the refinery is expected to be around US$ 8 - 9 bn annually
The BOI having approved the project in principle in July last year, the ensuing period has been utilized to obtain concurrence and approvals of all relevant Government Agencies and Organizations including the Cabinet of Ministers. With the BOI Agreement now signed, the immediate next step is a comprehensive Environmental Impact Assessment (EIA) compliant with the Terms of The refinery has projected demand for employment ranging from medium to high-end skill levels (operators, technicians, graduates, engineers, chemists, etc.) with direct employment opportunities for almost 6,500 Sri Lankans while creating further indirect employment opportunities in support services. This project can be considered a catalytic investment which will boost liquid cargo shipments to the Port of Hambantota, thereby resulting in added revenue in foreign currency for inward/outward movement of ships carrying crude oil and finished products.
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