Ceylon Petroleum Corp. to expand fuel storage capacity
State-owned Ceylon Petroleum Corporation (CPC) has signed a memorandum of understanding (MoU) with the Hambantota International Port Group (HIPG) to boost its fuel storage capacity near the Hambantota Port in Sri Lanka.
CPC currently imports petroleum products to meet approximately 70% of Sri Lanka’s demand. CPC’s existing storage facility can store Sri Lanka’s petroleum product requirements for 30 days. CPC believes it needs to boost its petroleum product storage capacity to at least 90 days.
The new facility, to be located on 50 acres owned by the Sri Lanka Mahaweli Authority, about 15 kilometres from the port, will expand CPC’s storage and bulk distribution facilities. The storage facility will be connected to the port via pipeline.
“The growing demand for fuel in the past, combined with the country’s anticipated development in every aspect, has resulted in the opening up of opportunities for investors to establish ventures in Sri Lanka. In this context, CPC’s product portfolio has to be managed to suit the energy mix of the country if we are to be competitive, especially in comparison with other energy sources,” said Sumith Wijesinghe, CPC chairman.
The partnership with HIPG would increase the storage facility of CPC to the expected capacity.
HIPG will sublease the required land area within the port for the construction and operation of the pipeline, with approval from the Sri Lanka Ports Authority. All port and terminal related facilities and services will be provided by the port, including stevedoring services for the import, export and transhipment of petroleum products and crude oil subject to feasibility studies.
“The vision of HIPG is to develop the Hambantota International Port to become an energy hub for South Asia. Whilst HIPG has put the infrastructure in place to realise that goal, we are also aware that we cannot achieve it without the participation of all the players in the equation,” HIPG Chief Executive Officer Johnson Liu said.
The signing ceremony was held early this month at the Ministry of Energy.