Work on $3.85B Lanka refinery starts

Mohammed bin Hamad Al Rumhy and Ranil Wickremesinghe at the groundbreaking ceremony of the oil refinery and storage complex in Hambantota on Sunday.

Sri Lanka began construction Sunday of a nearly $4 billion oil refinery it hopes will revive foreign interest in its shipping facilities after Beijing's takeover of a nearby port spooked international investors.
Prime Minister Ranil Wickremesinghe said Hambantota, a district in Sri Lanka's south, which lies on one of the world's busiest shipping lanes, would become a global investment hub with the addition of the oil refinery and storage complex.
The $3.85 billion project is the single largest foreign investment in Sri Lanka's history. It is jointly funded by Oman and Singapore-registered Silver Park International, a company owned by an Indian business family.
The oil facility is near the port of Hambantota.
"The interest shown by the Oman government, the interest shown by many other investors from other parts of the world shows that Hambantota will become a truly international investment zone," Wickremesinghe said on Sunday.
Wickremesinghe also said he hoped to strike a deal within three months with Indian airport authorities to revive a $210 million airport in Hambantota dubbed the "world's emptiest" international terminal for its lack of flights.
The oil storage tanks are expected to be completed within two years while the refinery is due to be up and running by 2023. Once fully operational the refinery - the second in Sri Lanka - is to export nine million tonnes of petroleum products annually.
Oman oil minister excited to be part of project
Meanwhile, Oman's oil minister Mohammed bin Hamad Al Rumhy said on Sunday he was excited to be part of the oil refinery project in a sign that plans for the sultanate's involvement may be back on track.
Sri Lanka said last week that Oman Oil had made clear it was interested in taking a 30 per cent stake in the new refinery on Sri Lanka's south coast.
But an Omani official denied the Middle Eastern country had agreed to invest in the project.
Al Rumhy joined Wickremesinghe at the laying of the foundation stone for the planned $3.85 billion oil refinery at Hambantota on the south coast, which would potentially be the island's biggest foreign direct investment.
"This is not a project just for three years. This is a life long project," Al Rumhy said at the launch ceremony held at the Mirijjawala investment zone in Hambantota. "We will work very hard to deliver this project to the people of Sri Lanka."
However, he did not comment on whether Oman planned to have a direct stake in the refinery.
The refinery will be built near a $1.4 billion port controlled by China Merchants Port Holdings. India-based Accord Group is the main investor in the refinery project, through a Singapore entity it controls.
The project will be Sri Lanka's first new refinery in 52 years after Iran built a 50,000 bpd refinery near the island's capital city of Colombo to blend Iran light oils. The new refinery will export all products it refines, officials have said.
"We have Chinese investment, we have Indian investments, we have Oman interest for investment, and we have investment interest from many other countries," Wickremesinghe said at the event. "It shows that Hambantota will become the multinational investment zone."
A senior Sri Lankan minister, who declined to be identified because he is not authorised to talk to the media, told Reuters Oman had given a commitment to invest in the refinery and there would not be any turning back. But on Wednesday, Salim Al Aufi, the undersecretary of Oman's oil and gas ministry, said "no one on this side" was aware of the investment.
Sri Lanka's investment board said last week that another Oman entity, Oman Trading International, was willing to supply all of the refinery's feedstock needs and take on the marketing of the oil products it would produce.