Sri Lanka’s state owned petroleum company to a test and Algerian crude oil to broaden supply sources
The government of Sri Lanka has reportedly taken steps to permit the state owned petroleum company to test a crude oil from Algeria in a bid broaden supply sources for its refinery. Sri Lanka’s refinery is currently optimized for Iranian crude oil that is now subject to American sanctions.
Petroleum Resources Development Arjuna Ranatunga has been quoted in the media as saying that the Ceylon Petroleum Corporation (CPC) was no longer importing Iranian crude oil.
The CPC was looking for alternative crude blends to diversify its sources of supply, the Minister has said.
According to reports, CPC’s 50,000 barrels per day refinery is old and optimized for refining Iranian crude but has relied on other crude blends in recent years.
The latest under consideration is the Saharan blend from Algeria, Managing Director of Ceylon Petroleum Storage Terminal Limited (CPSTL), Sanjeewa Wijerathna has told the media.
The CPSTL is a terminal operator which conducts bulk petroleum storage and distribution for the CPC.
“The CPC refinery can use only very sweet and very light crude oil but very few crudes meet these specifications,” Wijerathna has said.
“In the past seven years we buying Murban crude from Abu Dhabi which gives us very good yield in the refinery,” he has added.
However, local media reports state that Murban crude is costly as it is difficult to buy on a government-to-government basis since Sri Lanka’s volumes are small.
“Another alternate is Saharan blend from Algeria which we are testing to determine the output. Not only is it cheaper but the yield is better,” Wijerathna has noted.
OSL take:
The testing being carried out on Algerian oil by Sri Lanka’s state owned petroleum company indicates an opening of an opportunity for international petroleum companies to provide crude oil at competitive rates to the island nation. Sri Lanka is currently looking for alternative oil that could be refined in the country’s refinery. Interested foreign companies could explore the possibility of providing oil that fit the specs of the Sri Lankan refinery.
| Article Code : | VBS/AT/20181026/Z_4 |