H’tota oil refinery, largest FDI project - BOI | Sunday Observer

H’tota oil refinery, largest FDI project - BOI

17 November, 2019
After the signing of the agreement. BOI Chairman Mangala Yapa with Sugih Energy Director Danny Lee.
After the signing of the agreement. BOI Chairman Mangala Yapa with Sugih Energy Director Danny Lee.

Hambantota Oil Refinery Pvt Ltd., an affiliate company of Sugih Energy International Pte Ltd, a privately-owned petroleum and coal trading company based in Singapore plans to set up a petroleum refinery in Hambantota.

The refinery, with a capacity of 420,000 barrels/day for export, is expected to bring in about US$ 24 bn, over a period of 60 months, making it the largest Foreign Direct Investment (FDI) project to date, a spokesman for the BOI said.

The initial phase will involve the commissioning of the petroleum refinery with plans to develop 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 approved the project in July last year. The ensuing period has been used to obtain concurrence and approvals of all relevant Government agencies and organisations, including the Cabinet of Ministers.

With the BOI Agreement now signed, the next step is a comprehensive Environmental Impact Assessment (EIA) compliant with the Terms of Reference issued by the Central Environment Authority (CEA) and other regulatory bodies, to be conducted before the 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.

The refinery has projected demand for employment ranging from medium to high-end skill levels (operators, technicians, graduates, engineers and chemists) with direct employment opportunities for almost 6,500 Sri Lankans while creating 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.

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 spokesman said.