Sri Lanka to build second oil refinery with Indian Oil Corp.

Sri Lanka announced plans to build a second oil refinery with a capacity of at least 100,000 barrels per day (bpd) together with India’s largest state-owned oil company Indian Oil Corp. (IOC).

Lanka IOC, the Sri Lankan subsidiary of Indian Oil Cor. operates 189 fuel retail outlets, a lubricant blending plant, and 15 storage tanks out of the 99 storage tanks in Trincomalee. Lanka IOC was given control of the Trincomalee oil tank farm in 2001, under a 30-year agreement. The Sri Lankan government has also asked Lanka IOC to jointly develop and operate the remaining unused 84 storage tanks.

T.G. Jayasinghe, head of Sri Lanka’s state-owned oil company Ceylon Petroleum Corp. (CPC), said the new refinery will be built at the eastern port city of Trincomalee.

Ceylon Petroleum Corp. (CPC) operates Sri Lanka’s only refinery, which has a capacity of 50,000 bpd. The CPC refinery is configured to run on Iranian crude, and because of U.S. economic sanctions against Iran, had to import more refined petroleum products.

Sri Lanka’s Oil Minister Chandima Weerakkody also said Sri Lanka plans to upgrade its existing oil refinery to give it more crude flexibility.

Investment in the new refinery and in the refinery upgrade project was not announced.