The government is considering to establish a new refinery at Sapugaskanda as the old refinery does not meet the local demand.
The existing capacity of the refinery located at Sapugaskanda belonging to the Ceylon Petroleum Corporation is only 40,000 barrels per day (bblspd), and it meets only 25% of the local demand for refined petroleum products, a statement on cabinet decisions said.
The remaining 75% has to be imported, relying much on the foreign exchange.
The government plans to set up a new refinery with the increased capacity up to 100,000 bblspd.
A feasibility study had been conducted in 2010 for the renovation and expansion of the refinery to increase that capacity up to 100,000 (bblspd). However, the subsequent technological changes that have taken place in that field have made it impossible to proceed on the results of the feasibility study, the government has noted.
Accordingly Minister of Energy has made a proposal to take necessary action to initiate a new feasibility study by the Ceylon Petroleum Corporation to determine the scope, technical, operational and financial feasibility of the project.
The project is to be implemented with a focus on several alternative proposals to enhance the existing refinery capacity of petroleum products.
The cabinet of ministers has approved the proposal to initiate a new feasibility study.