Despite the 06 months since the agreement was signed for the $3.7 billion Sinopec oil refinery in Hambantota, the project remains stalled due to unresolved disputes over local market access, reports reveal.
The project, signed during President Anura Kumara Dissanayake’s state visit to Beijing in Jan. 2025, was touted as Sri Lanka’s largest-ever foreign direct investment (FDI) project.
It involves China’s state-owned petroleum giant Sinopec constructing a state-of-the-art refinery with a capacity of 200,000 barrels per day in Hambantota.
According to the media release issued by the President’s Media Division on the occasion of the signing in Jan. 2025, a substantial portion of the refinery’s output was planned for export, further enhancing the nation’s foreign exchange earnings.
“This major investment from China is expected to bolster Sri Lanka’s economic growth while uplifting the livelihoods of low-income communities in the Hambantota area. Moreover, the benefits of this project are anticipated to positively impact the overall Sri Lankan population in the near future,” the PMD release further noted.
According to ‘Daily Mirror’, the project has hit a snag over the government imposing a 20% cap on the company’s local sales, despite Sinopec’s demand for unrestricted access to Sri Lanka’s domestic fuel market.
A senior Energy Ministry official, on the condition of anonymity, has confirmed that no agreement has been reached on the market share issue, though discussions are underway to resolve the matter, the report adds.
