The Government of Sri Lanka has signed a US$24bn deal with Hambantota Oil Refinery, an affiliate of Sugih Energy International, to build a new 420,000 bbl/d oil refinery at the Magapura Mahinda Rajapakse Port in Hambantota, in the south of Sri Lanka. The construction of the project should be completed within 5 years.
Sugih Energy International is a privately-owned petroleum and coal trading company based in Singapore. Export revenues envisaged upon commissioning of the refinery are expected to be around US$8-9bn/year.
Built by Chinese companies China Harbour Engineering Company and Sinohydro Corporation as part of the Maritime Silk Road, the Hambantota port was commissioned in 2010. As Sri Lanka struggled to repay the debt contracted to finance its construction, the government decided to hand over the harbour for 99 years to China in 2017. The Board of Investment of Sri Lanka (BOI) expects the refinery to enable transformation of the Port of Hambantota as a Marine Bunker Port, taking full advantage of its proximity to international maritime routes (between Singapore and the Middle East).
In March 2019, the Ministry of Oil and Gas of Oman and the Singapore-based company Silver Park International (part of the Indian group Accord) pledged to invest US$3.85bn in a new 200,000 bbl/d refinery project near the Hambantota port.
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