The Sri Lankan government has approved a major expansion of the Sapugaskanda Oil Refinery, aiming to increase its capacity to 100,000 barrels per day under a Build-Operate-Transfer (BOT) model, Cabinet Spokesperson Dr. Nalinda Jayatissa announced.
According to the Cabinet decision, the Ceylon Petroleum Corporation (CPC) has made several attempts to modernize and expand the refinery to meet market demand, but previous efforts were unsuccessful. Recognizing the urgent need for an upgrade, the Cabinet had earlier approved the separation of the refinery from the CPC as a standalone state enterprise and explored potential partnerships with strategic investors.
Additionally, there were plans to establish a new oil refinery in Trincomalee, but no significant steps were taken in that direction.
With energy security now a top priority under the current government’s policy framework, the CPC Board of Directors has approved an Expression of Interest (EOI) process to identify a suitable investment partner based on a 2022 feasibility study.
As a result, the Cabinet has now approved a proposal by the Minister of Energy to invite investors and financiers to participate in the development of the Sapugaskanda Refinery under the BOT model. The selected investor will be responsible for financing, operating, and later transferring ownership of the expanded facility.
The project is expected to significantly boost Sri Lanka’s refining capacity, reduce reliance on imported refined fuel, and support long-term energy sustainability for the country.
