Thursday, 1 August 2013 02:21
Govt. rejects 5,000 MT of fuel from PetroChina but contract to continue
CPC yet to makedecision on ENOC
Expert committee to mull expanding refinery
The Ceylon Petroleum Corporation (CPC) yesterday announced that 5,000 metric tons of 95 Octane petrol from PetroChina will be rejected after local analysts found that it was substandard.
The 5,000 metric tons valued at US$ 6 million was part of a mixed shipment of 5,000 metric tons of diesel and 25,000 metric tons of petrol that arrived earlier this week, Petroleum Resources Minister Anura Priyadharshana Yapa disclosed.
The first set of tests that were done on the oil showed that the shipment may be of substandard quality, provoking censure from local media.
In response, the Minister at a press conference insisted that the second round of testing had proved there were no quality issues in the 90 Octane and diesel components. He insisted that the Government would continue their long term contract with PetroChina and insisted that there had been no previous issues with the company.
PetroChina is China’s biggest oil producer and is the listed arm of state-owned China National Petroleum Corporation (CNPC), headquartered in Dongcheng District, Beijing.
Media censure was largely due to previous experiences when a stock of 40,000 metric tons of diesel fuel from Emirates National Oil Company (ENOC) was rejected by the Sri Lankan Government in June on the grounds that it was substandard.
However, ENOC after conducting its own tests has insisted that the consignment was up to standard and had appealed to the government to maintain its contract. Yapa noted that the Sri Lankan Government is yet to make a final decision on ENOC.
Sri Lanka gets about 200 shipments of oil a year and spends around US$ 6 billion per annum on fuel imports.
Yala went onto say that the Sri Lankan Government was also attempting to expand the existing refinery, which is engineered only for Iranian oil but was constrained by funding.
“I have discussed this with the Government and the Treasury and they also agreed that we should do it immediately. So we have certain proposals in hand so the expert committee will go into that and decide. I want to do it fast. I can’t give you a timeframe but it (Experts Committee) will happen within the next six months,” he said.
The Government had previously attempted to obtain funding from Iran but talks broke down due to the high cost.
“It’s a long process. It will be one of the biggest investments that the country will make, more than US$ 1 billion or US$ 1.5 billion, that is the rough estimate that we have. It can go up it can come down.”