Southern Tip

July 13, 2006 (LBO) – Emirates based Star Petro Energy LLC, has secured Sri Lankan government consent to build the country's second oil refinery in the south of the island, the government said Thursday. Built at a cost of around 1.5 billion dollars, the refinery’s entire output will be shipped to overseas markets, Media Minister Anura Priyadharshana Yapa told reporters.

"The government has given this investor two years to start the project," Yapa said but stopped short from disclosing Star Petro's refinery capacity.

A net oil importer, Sri Lanka consumes around 3.6 million metric tones each year, of which around 2.0 million metric tones are refined at the island's sole refinery owned by state-run Ceylon Petroleum Corp.

The Sapugaskanda refinery now produces around 50,000 barrels per day, in mix of diesel, gasoline, kerosene, furnace oil and naphtha.

In April, Ceypetco sought a 500 million dollar loan from Saudi Arabia to double its oil refinery capacity to 100,000 barrels per day.

Since Sri Lanka's production falls short of total requirement, CPC also hopes to buy some of their requirements once the Hambantota refinery starts, Yapa said.

Greater dependence on locally ref