Amendments have been made to the Ceylon Petroleum Corporation (CPC) Act No. 28 of 1961, in an attempt to boost refinery capacity and build new refinery in the years ahead.
The amendments were approved by Cabinet this week and aim to strengthen the framework of the upcoming bill, which will permit the setting up of refineries on a “build, operate and transfer (BOT)” basis refinery, with around 100,000 barrels being produced a day (b/d).Furthermore, In order in to select an investor on BOT basis,
The government plans to call for international bids for the proposed refinery by November/December 2021.
As of now 75% of the demand for all refined petroleum products is met through imports, while 25% of demand is sourced by the Sapugaskanda refinery locally.
The proposal to amend the act, was initially put forward by the Minister of Power and accordingly a draft bill was initially prepared, with suggested amendments to the Act.Amendments to the existing Act were necessary, as the CPC currently holds a monopoly in the refinery industry and this obstructs the process of building a new refinery on a BOT basis.
Speaking in this matter, PM Gammanpilla said that the proposed refinery is likely ot be the “single largest project in Sri Lanka” with an projected investment of Rs. 600 billion.
A feasibility study is being conducted on the new refinery and will be concluded in October. In November 2020, the Cabinet approved a proposal for CPC to initiate a new feasibility study. The purpose of the study was to determine the financial, operational and technical feasibility of the planned 100,000 b/d expansion. The last feasibility study was conducted in 2010, with regards to rennovations and expansions.