Oil and Gas Minister Of Oman arrives in Sri Lanka for ground breaking ceremony of Oil refinery in Hambantota
Earlier there had been a news regarding building of a oil refinery by Oman, Singapore and India in Hambantota. However the Oman’s Oil and Gas Ministry had denied being part of this $3.85 billion plan to build an oil refinery in Hambantota.
This denial was made after Sri Lanka’s Board of Investment (BOI) had announced that Oman oil ministry and Silver Park International PTE Ltd – a Singapore investment vehicle owned by India’s Accord Group had agreed to build the 200,000 barrel per day refinery near Hambantota port with the historic investment.
This is first of the indirect Indian investment in Hambantota, where Chinese have already made some big investment in the Port. The Hambantota Port also known as the Magampura Mahinda Rajapaksa Port is a maritime port in Hambantota, Sri Lanka.
The first phase of the port was opened on 18 November 2010, with the first ceremonial berthing of the naval ship “Jetliner” to use the port facilities.
It is built inland and operated by the Sri Lanka Ports Authority. Total estimated construction cost of the Phase 1 of the project was US $361 million, out of which 85% was funded by the EXIM Bank of the People’s Republic of China.
The port in 2013
Construction of the port commenced in January 2008. It is now Sri Lanka’s largest port, after the Port of Colombo. The Port of Hambantota serves ships travelling along the east-west shipping route which passes six to ten nautical miles (19 km) south of Hambantota.
The port provides bunkering, ship repair, ship building, and crew change facilities. The port capacity is now up to 20 million TEUs per year. When fully completed, it will become the biggest port constructed on land to date in the 21st century.
Hambantota port now has 600m general purpose berths, a 310m bunkering berth and a 120m small craft berth. It has a bunkering facility and tank farm which includes 8 tanks for marine fuel, 3 tanks containing aviation fuel and 3 for Liquid Petroleum Gas (LPG).
The mouth of the natural harbor at Hambantota has a 22-metre depth. When completed, the port will have a 1.5 km long breakwater, with a minimum basin depth of 17 m. This is compared to the 15.5 m depth of the Port of Colombo.
The turning circle will be 600 m. A dam will also be built to prevent flooding in nearby areas, and a seawall made of interlocking concrete blocks will protect the port from high seas. A $550 million tax-free port zone was set up outside the port.
In 2016 a 15,000 acre SEZ project was announced with 5,000 acres from Hambantota and the rest from Monaragala, Ambilipitiya and Matara. The finished project is expected to provide indirect employment to over 50,000 people.
The Hambantota Port in 2016 had made a revenue of US$11.81 million and incurred expenses of US$10 million as direct and administrative costs to report an operating profit of just US$1.81 million.
As the port incurred heavy losses, making debt repayment difficult, in 2016 it was proposed to lease 80% of the port in a debt-for-equity swap to the China Merchants Ports holding company who then invested US$1.12 billion to revive the port under a public–private partnership.
Later, it was decided that under the agreement, CMPorts would divest 20% of its shares to a Sri Lankan company within ten years. In July 2017, the agreement was signed, but leasing only 70% of the Port to CMPort instead of the initially proposed 80%.
In July 2018, it was announced that Sri Lanka would relocate its naval base at Galle to Hambantota.
However now Oman’s Minister of Oil and Gas Mohammed bin Hamad Al Rumhi has arrived in Sri Lanka on Saturday to attend the ground breaking ceremony of Oil refinery in Hambantota scheduled for tomorrow.
Oman’s Oil and Gas Minister Dr. Mohammed Hamad Al Ruhmy was received by Sri Lankan Minister Kabir Hashim at the Bandaranaike International Airport this afternoon.
“Hon. Al-Ruhmy will be attending the ground-breaking ceremony of the Hambantota oil refinery tomorrow,” said an official statement.
Chief Executive Officer of the Oman Oil Refineries and Petroleum Industries Company (ORPIC) Musab bin Abdullah al Mahrouqi has accompanied the Omani Oil and Gas Minister Dr. Ruhmy, who is also the chairman of the fully-state owned company.
During their stay, the Omani delegation is scheduled to hold talks with Prime Minister Ranil Wickremesinghe and other ministers.
The ground breaking ceremony will be held at the Mirijjawila Export Zone in Hambanthota tomorrow under the patronage of Prime Minister Ranil Wickremesinghe.
The Premier will lay the foundation stone for two major investment projects in the history of Sri Lanka in the Mirijjawila Export Processing Zone tomorrow.
The BOI has now clarified that there is no agreement signed between Oman’s Ministry of Oil and Gas and Silver Park International with regard to equity arrangements of the project but the state-owned ORPIC has registered their firm intention to participate in equity up to 30% subject to reaching agreement between the parties.
