Sapugaskanda oil refinery closure ignites fuel insecurity
Sri Lanka has overlooked fuel security with the closure of the Sapugaskanda oil refinery for at least 120 days in 2021/22 due to the suspension of crude oil imports triggering an energy crisis that has led to island-wide rolling power cuts, several Ceylon Petroleum Corporation (CPC) engineers complained.
This refinery is used to produce naphtha and furnace oil to run the thermal power plants specially the Kelanitissa and Sapugaskanda Power Plants in addition to refining 92 Petrol, Auto Diesel, LP Gas, Kerosene oil and Jet A one high quality aviation fuel.
The decades-old Iran-built oil refinery with a capacity of 50,000 barrel-per-day could fulfill 43 per cent of the fuel demand of the country, they said.
The shutting down of the oil refinery from time to time for a long period would definitely cause mechanical and technical defects; senior equipment engineer of the CPC Janaka Wijesuriya said adding that restarting the system frequently and repairs were very costly. Some spare parts will have to be imported from the US and it has become a difficult task at present due to the dollar crisis.
This situation would not have arisen if the CPC stuck to the crude oil procurement plan of importing two shipment of 90,000 metric tonnes per month and 24 such consignments per year on term tenders , he pointed out.
However the Energy Ministry had taken a decision on November 15, 2021 to temporarily shut down the Sapugaskanda oil refinery for 50 days and to cancel the procurement plan for 2022 due to a severe dollar shortage at that time. Since then the CPC continues to import refined petroleum products on spot purchasing to meet the fuel demand.
This plant was operating continuously for 365 days and had to shut down once in every two years for a period of one month for maintenance.
The Sapugaskanda plant would produce 575 MT of 92 petrol daily to cater to its demand of 3500 MT per day which is 16 per cent of the demand, auto diesel 1600 MT – 29 per cent for the country’s daily requirement of 5500 MT and Kerosene 700 MT which is 100 per cent of the demand of 700 MT per day.
It has the capacity to produce 600 MTs 50 per cent of JET A one aviation fuel to meet the daily demand of 1200 MTs, 400 MTs of Chemical Neptha 100 per cent for the Kelanitissa power plants requirement of 400 MTs, and furnace oil 1800 MTs 75 per cent of the Sapugaskanda power plant’s daily requirement of 2400 MTs as byproducts of the refinery.
The oil refinery was also producing 100 MT of LP Gas, 9 per cent of the demand of 1200 MT per day and this is equivalent to 2200 12.5 kg LP gas cylinders.
Even under this set up, the CPC was of the view that there was no big demand for furnace oil and aviation fuel as the power generation was mainly from hydro and coal power plants due to receiving of high rainfalls in catchment areas at that time.
Therefore the Energy Ministry top officials decided to import petrol and diesel which are in high demand via unsolicited bids and spot purchasing in accordance with dollar availability.
Soon after the rainy season, CEB had to operate thermal power plants and by that time there was no back up fuel supply from Sapugaskanda oil refinery due to its closure and the suspension of crude oil imports.
This created the energy crisis as a result of the failure to maintain the fuel security, Mr. Wijesuriya said adding that the shutdown of the refinery has deprived the country of 43 per cent petrol and diesel production.
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