Energy Security to the Nation
The Ceylon Petroleum Corporation (CPC) signed a Memorandum of Understanding with the Hambantota International Port Group (HIPG), last week to develop Hambantota Port as a strategic energy center in Sri Lanka. The signing ceremony was held at the Ministry of Energy, with top officials of CPC and HIPG participating.
A separate storage terminal with associated facilities for both domestic and export purposes connected to the Port via a pipeline is to be established by CPC, about 15 Kilometers away from the Port. CPC, the state entity which provides the majority of petroleum products to local consumers, has identified a land area of approximately 50 Acres owned by Sri Lanka Mahaweli Authority for the project. The new facility is expected to expand storage and bulk distribution facilities of CPC.
The existing storage facility of CPC/CPSTL is sufficient to store refined petroleum product requirements of the entire country for a period of only one month, a capacity below the requirements of ensuring the energy security of the country. CPC currently imports refined petroleum products to cater to, approximately, 70% of the country’s demand via the Colombo port and suburbs. CPC has identified the need to increase its fuel storage capacity to cater to at least three months of the country’s demand.
“The growing demand for fuel in the past, combined with the country’s anticipated development in every aspect, has resulted in the opening up of opportunities for investors to establish ventures in Sri Lanka. In this context, CPC’s product portfolio has to be managed to suit the energy mix of the country if we are to be competitive, especially in comparison with other energy sources. The partnership with HIPG will increase the storage facility of CPC to the expected capacity; thereby the impact of global fuel price fluctuations can be mitigated and it will drive CPC to minimize and save additional foreign currency outflows. Apart from that, setting up in the Hambantota Industrial Zone, away from the traffic congestion of the country’s most residential cities, will make it an environmentally friendly terminal. Taking all these factors into account, I believe this partnership will put an end to the negative external factors of the country’s fuel market,” says Sumith Wijesinghe, Chairman of CPC.