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Oman, Lanka launch $3.85 bn project


Hambantota: Oman and Sri Lanka launched the construction of a $3.85 billion oil refinery and storage complex in the southern port city of Hambantota in Sri Lanka on Sunday. Oil and Gas Minister Mohammed bin Hamad al Rumhy and Sri Lanka Prime Minister Ranil Wickremesinghe unveiled the plaque of the project, which the island nation hopes will revive interest in a shipping zone where a Chinese-run port has attracted international concern. Al Rumhy said he was excited to be part of the Sri Lanka oil refinery project.

Prime Minister Wickremesinghe said Hambantota, 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.

Sri Lanka originally said Oman planned to take a 30 per cent stake in the refinery, which will be built near a $1.4 billion port controlled by China Merchants Port Holdings.

The Accord Group is the main investor in the refinery project, through Singapore-based Silver Park International, it controls.

The $3.85 billion project is the single largest foreign investment in Sri Lanka’s history. “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.

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.

The Indian Ocean island nation does not have oil of its own. It refines imported crude, but the existing refinery is unable to meet demand.

The Hambantota port was built by former president Mahinda Rajapakse. — AFP/ Reuters

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