China to set up oil company in Sri Lanka

Colombo (News 1st): Foreign media reported that China Petroleum and Chemical Corp, known as Sinopec Corp will set up a fuel company in Sri Lanka as it looks to supply fuel to ships along a major maritime route. The new unit, called Fuel Oil Sri Lanka Co Ltd, has been registered in Hambantota. Fuel oil is a refined product mostly used as bunker fuel for ships and is also used in power stations. Chinese media reported that Sinopec stressed the strategic location of Hambantota port on the Indian Ocean along a key shipping route between the Suez Canal and the Malacca Strait, which is transited by two-thirds of global oil shipments. Sinopec has set a company-wide target of 10 million tonnes of production capacity by 2020 to supply low-sulfur bunker fuel that meets the cleaner emission standards set by the International Maritime Organization. The move marks the latest investment in Sri Lanka by China, which sees the South Asian island nation as a pivotal part of its Belt and Road Initiative infrastructure plan. China Merchants Port Holdings, China Harbour Engineering Corp and other Chinese companies are investors in the port and industrial zone. It is against this backdrop, an economic corridor from Trincomalee to Colombo is being planned to be constructed by the United States. Meanwhile, construction on the Hambantota Mirrijiwela Oil Refinery and a cement factory, dubbed as the largest investment in Sri Lanka began on the 24th of March. It was reported that the new oil refinery that spans across 200 acres is scheduled to be constructed within 44 months. According to the Sri Lankan government, Singapore registered Silver Park International is one of the main investors for the oil refinery project.