Sinopec to build new refinery at Sri Lanka's Hambantota Port

Sinopec to build new refinery at Sri Lanka’s Hambantota Port

The Sri Lankan cabinet has approved a proposal from China's energy giant Sinopec to establish a new USD4.5 billion petroleum refinery at the strategically located Hambantota Port. This announcement was made by Sri Lanka's Energy Minister Kanchana Wijesekara, marking a significant milestone in the island nation's energy sector.

The Sinopec refinery, representing the largest foreign direct investment in Sri Lanka to date, is set to enhance the country's petroleum processing capabilities significantly. In addition to the refinery, the project includes the establishment of an associated products training center, further bolstering the nation's energy industry expertise.

Hambantota Port, Sri Lanka's second-largest port, has been a focal point of strategic development since its inauguration in 2010. Managed under a joint venture between the Sri Lanka Port Authority and China Merchant Ports, known as the Hambantota International Port Group, the port has seen substantial Chinese investment. This includes a 99-year lease agreement with China Merchant Port Holdings in 2017 and a multimillion-dollar deal to develop a logistics and storage hub at Colombo Port.

The decision to greenlight Sinopec's refinery project aligns with Sri Lanka's broader economic strategy, which seeks to leverage its geographic position and enhance its role in regional maritime trade. The investment by Sinopec, which entered the Sri Lankan market in July 2023, is a testament to the growing economic ties between China and Sri Lanka, particularly in the realm of infrastructure and energy.