Sapugaskanda Refinery Upgrade to Shape Sinopec’s Investment Decision
- CNL Reporter
- October 12, 2025
- News, Power and energy
- Sapugaskanda Refinery
- 0 Comments
The Sapugaskanda Oil Refinery modernization project has entered a crucial phase as the government evaluates 20 global Expressions of Interest (EOIs), a process expected to influence Sinopec’s $3.7 billion refinery project in Hambantota.
Sri Lanka’s sole refinery, built in 1969, currently processes only 38,000 barrels per day, meeting less than a third of national demand. The proposed expansion aims to boost capacity to 100,000 barrels daily, reducing reliance on imported fuels that cost the country billions in foreign exchange.
Industry analysts say the results of the EOI evaluation could determine whether Sinopec proceeds with its Hambantota investment, which includes building a 200,000-barrel-per-day facility. The Chinese firm has also sought a higher share of Sri Lanka’s retail fuel market, currently capped at 20%.
The Sapugaskanda upgrade is viewed as vital for improving fuel quality, efficiency, and environmental compliance. With both projects valued at over USD 6.7 billion combined, their progress will shape Sri Lanka’s future as a regional energy player and test its ability to attract and retain large-scale foreign investments.
