The U.S. based
Honeywell UOP has won a contract in Sri Lanka to design improvements and upgrade
the state-run Ceylon Petroleum Corporation's crude oil refinery. Secretary of
the Ministry of Petroleum Resources, Sunil Hettiaarachchi told the media that
the contract is going to Honeywell UOP, previously known as UOP LLC or
Universal Oil Products, a multinational company.
He said the project
was planned to upgrade the machinery, allowing the Ceylon Petroleum Corporation
to increase production at the refinery from the current capacity of 50,000
barrels per day to 70,000 barrels.
The Secretary of
the Petroleum Ministry highlighted that the company was selected after calling
for tenders as per the International Competitive Bidding (ICB) methodology, and
the only bidder was the U.S. firm. The firm also had previous experience in
building Sapugaskanda's new refinery. Under
the three-year project. which is expected to begin in the latter part of 2019,
the first year of the project is dedicated to designing and the next two years is
for construction.
The central
crude distiller column would be removed under the plan to increase the
efficiency of the refinery. Also, the company will modernise the oil refinery
to raise its capacity from 500 Mt to 1000 Mt. Mr. Hettiaarachchi said it was planned
as such that the modernisation of the refinery would minimise the import of
finished petroleum products taking it from 70% to 50%.
Only about 30
per cent of the oil requirement in Sri Lanka is currently refined by the state.
The modernisation would also require the improvement of various types of crude
oil. At present, only two classes are refined, Mr. Hettiaarachchi said.
OSL Take: The
Sri Lankan government’s decision to re-commence the manufacture of Bitumen in
the country is indicative of the growth in demand for the particular petroleum
product. The statement by the Petroleum Minister of Sri Lanka also indicates a
rapid increase in the country’s construction industry, which is a positive sign
for foreign companies who are considering investing in Sri Lanka’s construction
sector. Also, the Sri Lankan government’s decision to construct a second oil
refinery indicates growing investment/business opportunities in the country’s
petroleum sector.
VBS/AT/20191101/Z_TB6
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