Singapore-based Sugih Energy proposes oil refinery at Hambantota

A proposed investment by Hambantota Oil Refinery PVT Ltd. (HOR), an affiliate company to Singapore-based petroleum and coal trading company Sugih Energy International Pte Ltd, will transform Hambantota port into a bunkering location, says the Board of Investment of Sri Lanka (BOI).

HOR on Friday (15 November) submitted a proposal for the construction of a 420,000 barrels/day capacity petroleum refinery for export markets at Hambantota, which amounts to approximately US$ 24 billion, over a period of 60 months, making this the largest Foreign Direct Investment (FDI) project for Sri Lanka to date.

“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,” stated BOI.

“Additionally, the refinery will also enable transformation of the Port of Hambantota as a Marine Bunker Port, taking full advantage of its proximity to international maritime routes.”

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 billion annually.

BOI initially provided approval for project in principle in July last year, the ensuing period has been utilised 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 Reference already issued by the Central Environment Authority (CEA) and other regulatory bodies, to be conducted prior to implementation of the project.

This EIA will be augmented with a Health and Safety assessment, which, though not mandatory, will ensure the project is in line with industry best practices while ensuring the enhanced sustainability of the project.

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Photo credit: Board of Investment of Sri Lanka
Published: 15 November, 2019