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Petroleum Resources Development Arjuna Ranatunga said the Ceylon Petroleum Corporation was no longer importing Iranian crude oil.
It was looking for alternative crude blends to diversify its sources of supply, he said.
The CPC’s 50,000 barrels per day refinery is old and optimised for refining Iranian crude but has relied on other crude blends in recent years.
The latest under consideration is the Saharan blend from Algeria, said Sanjeewa Wijerathna, managing director of Ceylon Petroleum Storage Terminal Limited, a terminal operator which does 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,” he said.
The CPC lacks equipment known as a hydro cracker to make petrol and diesel from residual fuel oil after refining which it now sells at below market price.
“In the past seven years we buying Murban crude from Abu Dhabi which gives us very good yield in the refinery,” Wijerathna said.
But Murban crude is costly as it is difficult to buy on a government-to-government basis since Sri Lanka’s volumes are small.
“So we are forced to buy in the world market at a premium,” Wijerathna said. “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.” (COLOMBO, 24 Octber, 2018)