Govt. eyes Sapugaskanda oil refinery upgrade

• Aims to double capacity from current 35% of fuel requirement  
• Plans to use expertise of local engineers for upgrading process
• Says Govt. plans to build two new facilities in Trincomalee and Hambantota
• Special discussion to be held with President and PM

By Nuwan Senarathna

The Government has decided to upgrade the decades-old Sapugaskanda oil refinery to produce a higher percentage of fuel needed by the local market and also plans to set up two more refineries in Hambantota and Trincomalee.

Speaking to media at the Sri Lanka Podujana Peramuna (SLPP) head office, State Energy Minister Rohitha Abeygunawardena said the Government would expect to double the capacity of the Sapugaskanda oil refinery in the medium term.  

State Energy Minister Rohitha Abeygunawardena – Pic by Ruwan Walpola

“I have instructed officials to study how to increase the capacity of the Sapugaskanda refinery as a move to reduce imports of refined fuel. This will save us foreign exchange,” he said.

The 50-year-old facility refines imported crude oil to supply 35% of the energy demand of the nation. The renovation process of the facility will be conducted by the local engineers who have been working at the facility, Abeygunawardena added.

He opined that using technical expertise of local engineers would be cost effective and sustainable if any services were needed in the future. “A group of local engineers attached to the facility expressed their willingness to work on this project. These engineers have enough experience and knowledge to upgrade the facility.”

He noted a special discussion would be held with the President and Prime Minister in the first week of January and a proposal to upgrade the facility would be handed over to both the President and Prime Minister. Abeygunawardena stressed the Government would target increasing the country’s oil refinery capacity to 80% in the medium term and expand to 100% in the future. In addition he said the Government planned to build two refineries in Trincomalee, possibly near the existing oil tank farm and in Hambantota.

“Trincomalee and Hambantota are strategically important. If we build two refineries that will be very beneficial to reduce fuel prices as the refining of crude can be done locally. The Trincomalee oil tank farm is an ideal location for an oil refinery as distribution can be done to the north and central parts of the country,” he added.

The Trincomalee oil tank farm consists of 99 tanks and only 15 of the tanks are currently in operation. Indian Oil Corporation Subsidiary Lanka IOC uses 15 tanks.

The previous administration also conducted a 35-day overhaul renovation program aimed at boosting efficiency of the facility. The renovation process commenced on 19 February 2018 and over 1,200 employees including engineers and mechanics joined the operation.

The foundation stone was laid for a $ 3.8 billion refinery project in Hambantota by the previous administration.