14-01-09 Sri Lanka expects to sign an "early work agreement" with the National Iranian Oil Company for a project to double its state-owned Sapugaskanda refinery capacity to 100,000 bpd, oil minister A.H.M. Fowzie said.
The 50,000 bpd refinery of Ceylon Petroleum Corp., which is about 30 years old, will be upgraded and expanded. A feasibility study will follow the initial agreement with NIOC, which is expected to take two months, Fowzie said, speaking on the sidelines of the Petrotech oil and gas conference in New Delhi.

"We will start work [on the expansion] this year," the minister said, adding that the project was expected to be completed in four years.
The Iranian government had offered a $ 1 bn loan for the project, and the Sri Lankan government would put up another $ 500 mm. Iran satisfies Sri Lanka's entire crude requirements, with a supply of 60,000 tons of Iranian Light on a monthly basis. Tehran has also extended Sri Lanka a three-month rolling credit line to pay for its crude imports, Fowzie added.

The Sri Lankan government has no more refinery projects planned in the state sector, but a previously approved 100,000 bpd plant proposed by a private Dubai-based company at Hambantota in the south is still being finalized.
"We have given them two years," Fowzie said. This refinery would be export-oriented.