Govt. and Sinopec to sign deal on $ 4.5 b refinery by June: Minister

Saturday, 20 April 2024 00:21 - - {{hitsCtrl.values.hits}}

Power and Energy Minister Kanchana Wijesekera expresses Sinopec will respond by May on recommendations by Govt. for their concerns
Affirms Govt. will not deviate from EoI conditions

Power and Energy Minister Kanchana Wijesekera expressed optimism yesterday regarding potential developments with Sinopec, aiming for a comprehensive agreement aligned with the Government’s principles by next month, with a target to sign the agreement by June 2024.

He noted that concerns regarding the implications on land extent, logistics, port taxes, water resource management and compliance with Board of Investment (BoI) conditions emerged during deliberations with Sinopec having plans to increase capacities.

“There were concerns raised on plans to increase capacities. We have provided our recommendations and made our decision. I anticipate that Sinopec will return in May 2024 to finalise the Memorandum of Understanding (MoU) once all parties agree on the outlined principles,” he told journalists yesterday.

On 27 November 2023, the Cabinet of Ministers approved awarding the contract to Sinopec to forge an agreement for the establishment of a petroleum refinery and associated product processing centre in Hambantota. The proposed refinery project is expected to invest a minimum of $ 4.5 billion to be built in the Industrial Zone at the Hambantota Port.

Minister Wijesekera clarified that Sinopec would limit the sale of its volume to 10%, with no commitment from the Government to purchase any portion.

He also assured that the Government would adhere to the conditions outlined in the Expression of Interest (EoI) without deviation.

Last month, Sinopec Overseas Investment Holding (SOIHL) Vice President called on the Minister Wijesekera and updated on the progress of the negotiations with stakeholders for the construction of the proposed refinery in Hambantota.

“They intend to sign the agreements for the project and commence work by June 2024,” the Minister noted via ‘X’ on 28 March 2024.

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