Sri Lanka to award refinery project to Chinese company

Sri Lanka is set to sign an investment agreement with Sinopec to build an oil refinery in Hambantota, following the withdrawal of a competitor.

Share:

Le Sri Lanka va attribuer un projet de raffinerie à une entreprise chinoise

Subscribe for unlimited access to all the latest energy sector news.

Over 150 multisector articles and analyses every week.

For less than €3/week*

*For an annual commitment

*Engagement annuel à seulement 99 € (au lieu de 149 €), offre valable jusqu'au 30/07/2025 minuit.

Sri Lanka’s Minister of Energy, Kanchana Wijesekera, announced today that the government is about to award a major multi-billion dollar oil refinery project to Sinopec, a state-owned Chinese company. This decision follows the withdrawal of Vitol, leaving Sinopec as the only remaining bidder.

Announcement of oil refinery project

The refinery will be built next to a port managed by a Chinese state-owned company, in the southern city of Hambantota. The project, estimated to cost $3.85 billion, should contribute to the region’s economic development.

Sri Lanka terminates agreement with Silver Park

The project was initially awarded to Silver Park, a family-owned Indian company based in Singapore, with joint financing planned by Oman and Silver Park. However, due to Silver Park’s failure to start construction despite an inauguration ceremony in 2019, the government terminated the agreement in August and repossessed the land allocated to the project.

Hambantota port’s financial problems

Sri Lanka handed over the neighboring port of Hambantota to China Merchants Port for 99 years in 2017, sparking controversy due to the debt incurred by Sri Lanka for its construction. Situated on a busy seaway, the port failed to meet financial forecasts, resulting in major losses for Sri Lanka.

Sri Lanka has also had to contend with external debt problems, particularly towards China, which holds a large share of this debt. Beijing’s approval is therefore crucial to any effort by Colombo to restructure its foreign debt.

Sri Lanka’s decision to award the oil refinery project to Sinopec marks an important turning point in the country’s economic development. It also shows the importance of Chinese investment in Sri Lanka’s infrastructure and the need to manage external debt strategically to ensure financial stability in the future.

Baghdad and Damascus intensify discussions to reactivate the 850 km pipeline closed since 2003, offering a Mediterranean alternative amid regional tensions and export blockages.
A free trade agreement between Indonesia and the Eurasian Economic Union is set to be signed in December, aiming to reduce tariffs on $3 bn worth of trade and boost bilateral commerce in the coming years.
The visit of India's national security adviser to Moscow comes as the United States threatens to raise tariffs on New Delhi due to India’s continued purchases of Russian oil.
Brussels freezes its retaliatory measures for six months as July 27 deal imposes 15% duties on European exports.
Discussions between Tehran and Baghdad on export volumes and an $11 billion debt reveal the complexities of energy dependence under U.S. sanctions.
Facing US secondary sanctions threats, Indian refiners slow Russian crude purchases while exploring costly alternatives, revealing complex energy security challenges.
The 50% tariffs push Brasília toward accelerated commercial integration with Beijing and Brussels, reshaping regional economic balances.
Washington imposes massive duties citing Bolsonaro prosecution while exempting strategic sectors vital to US industry.
Sanctions imposed on August 1 accelerate the reconfiguration of Indo-Pacific trade flows, with Vietnam, Bangladesh and Indonesia emerging as principal beneficiaries.
Washington triggers an unprecedented tariff structure combining 25% fixed duties and an additional unspecified penalty linked to Russian energy and military purchases.
Qatar rejects EU climate transition obligations and threatens to redirect its LNG exports to Asia, creating a major energy dilemma.
Uganda is relying on a diplomatic presence in Vienna to facilitate technical and commercial cooperation with the International Atomic Energy Agency, supporting its ambitions in the civil nuclear sector.
The governments of Saudi Arabia and Syria conclude an unprecedented partnership covering oil, gas, electricity interconnection and renewable energies, with the aim of boosting their exchanges and investments in the energy sector.
The European commitment to purchase $250bn of American energy annually raises questions about its technical and economic feasibility in light of limited export capacity.
A major customs agreement sealed in Scotland sets a 15% tariff on most European exports to the United States, accompanied by significant energy purchase commitments and cross-investments between the two powers.
Qatar has warned that it could stop its liquefied natural gas deliveries to the European Union in response to the new European directive on due diligence and climate transition.
The Brazilian mining sector is drawing US attention as diplomatic discussions and tariff measures threaten to disrupt the balance of strategic minerals trade.
Donald Trump has raised the prospect of tariffs on countries buying Russian crude, but according to Reuters, enforcement remains unlikely due to economic risks and unfulfilled past threats.
Afghanistan and Turkmenistan reaffirmed their commitment to deepening their bilateral partnership during a meeting between officials from both countries, with a particular focus on major infrastructure projects and energy cooperation.
The European Union lowers the price cap on Russian crude oil and extends sanctions to vessels and entities involved in circumvention, as coordination with the United States remains pending.
Consent Preferences