Work begins on $ 40.8 m Muthurajawela-BIA jet fuel pipeline and storage expansion

President Anura Kumara Dissanayake (centre) shares a light moment with CPC Chairman D. J. Rajakaruna (right). Energy Minister Anura Karunathilaka (left) is also in the picture 

• CPC Chief says corporation booked Rs. 28 b profits this year, compared to Rs. 36 b in 2025

Construction of a dedicated Jet A-1 aviation fuel pipeline from Muthurajawela to Bandaranaike International Airport (BIA), along with two new petroleum storage tank systems, began yesterday under the patronage of President Anura Kumara Dissanayake.

The projects are being implemented by the Ceylon Petroleum Corporation (CPC) and Ceylon Petroleum Storage Terminals Ltd. (CPSTL) to strengthen energy infrastructure, improve fuel supply security, reduce transport costs and meet future aviation fuel demand.

The aviation fuel project includes a 21-kilometre, 10-inch diameter underground pipeline to carry Jet A-1, the standard fuel for commercial jet aircraft, directly from the Muthurajawela tank complex to BIA in Katunayake.

It also includes five new Jet A-1 storage tanks with a combined capacity of 92,000 cubic metres: two of 30,000 cubic metres each, two of 15,000 cubic metres each and one of 2,000 cubic metres. The project is scheduled for completion within 30 months.

The pipeline and storage facilities are expected to improve the reliability of aviation fuel supplies, reduce transport expenses and provide enough storage capacity for the aviation sector’s future requirements, the President’s Office said.

Separately, CPSTL began building three petroleum storage tanks at the Muthurajawela Terminal: two of 15,000 cubic metres each and one of 10,000 cubic metres, adding 40,000 cubic metres of capacity. The project has an 18-month contract period and is scheduled for completion in April 2028. It is intended to expand storage infrastructure, improve operational flexibility and support uninterrupted fuel distribution.

According to earlier Cabinet decisions, the aviation fuel project was awarded to China Petroleum Pipeline Engineering Company Ltd., for $ 40.8 million and Rs. 8.5 billion, inclusive of taxes. The CPSTL tank project was awarded to a joint venture of Indo-East Engineering and Construction and Ceylex Engineering for $ 3 million and Rs. 2.8 billion, excluding VAT.

Together, the two projects will add eight tanks with a combined capacity of 132,000 cubic metres at Muthurajawela. The tanks are being built to international standards and industry best practices, with a focus on safety, reliability and operational efficiency, and are expected to strengthen Sri Lanka’s fuel reserves and supply stability.

CPC Chairman D. J. Rajakaruna said:  “We faced a major challenge due to the war in the Middle East. However, with the intervention of the President, relief was provided to the people and the situation was managed very effectively.

As a result, while diesel prices in the global market increased by 91%, the increase in Sri Lanka was only around 39.5%. While petrol prices in the global market increased by 80%, the increase in Sri Lanka was only around 41%.

Despite providing fuel at lower prices in this manner, the Corporation has recorded a profit of Rs. 28 billion this year. We also recorded a profit of Rs. 36 billion last year. This may raise the question of why fuel prices are not being reduced when there are such profits. However, we have used those profits to commence a number of infrastructure development projects at the institution”.