Sapugaskanda oil refinery to be expanded

Irangika RANGE

COLOMBO: The Government will expand the Sapugaskanda oil refinery that would augment its oil producing capacity from 50,000 to 100,000 barrels per month targeting a monthly profit of Rs. 2,000 million while helping cushion the global rise in oil prices.

Addressing the weekly Cabinet press briefing, Petroleum and Petroleum Resources Development Minister A.H.M.Fowzie said a monthly income of Rs. 700 million is earned by the Government through the oil refinery.

He said the Sapugaskanda Oil refinery is 35 years and modernisation would benefit the consumers.

He said President Mahinda Rajapaksa, during his visit to Iran, signed an agreement with the Iranian Company that collaborates with the Government.

It is stipulated that the total cost of the project should not exceed US$ 1.5 billion. Seventy per cent of the estimated cost will be funded by the Iranian Government and the balance through local funding.

"We will do the modernisation in a transparent manner by obtaining Cabinet approval," the Minister said. He said to formulate an effective plan, initial studies are being conducted.

"Tenders will be called following consultation with local and foreign experts and studies on tender procedures in the world market will also be conducted." "Though several parties try to define this expansion as a fraud and misuse of public money, it is baseless as the project is being carried out following proper feasibly studies and technical evaluations," the Minister added.