UPDATE 1-Damaged buoy shuts Sri Lanka refinery, ship-to-ship transfer mulled

Thu Jun 26, 2014 8:34am EDT

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By Shihar Aneez and Ranga Sirilal

COLOMBO, June 26 (Reuters) - Sri Lanka's sole refinery has been temporarily closed due to a damaged buoy at its unloading facility and the island nation is considering ship-to-ship transfer to ensure continued crude supply for refinery operations, the oil minister said on Thursday.

The decades-old 50,000 barrels-per-day oil (bpd) Sapugaskanda refinery near Colombo has faced temporary closure several times due to repairs, maintenance, and not receiving crude on time.

"We've stopped unloading crude since May 25 due to a burst in a hose of the buoy and the refinery has halted operations since June 22," Oil Minister Anura Priyadharshana Yapa told reporters in Colombo.

"The refinery will be closed at least for another week. Until the repair is done (on the buoy), we will carry out our usual annual maintenance services during this period."

Yapa said two oil tankers - one partially unloaded and another fully unloaded - are anchored near the main port.

A Petroleum Ministry official said another crude parcel is expected on June 29.

"We are considering alternative arrangements, using ship-to-ship transfer to bring down the crude. We are trying to transfer the crude into smaller ships to bring to the nearest jetty at the port," Yapa said.

Officials said foreign technical experts are on the repair process.

Susantha Silva, managing director of the state-run Ceylon Petroleum Corporation (CPC) told Reuters that the repair done on Wednesday was not successful.

"But the ordinary public should not panic because we have enough refined products in stock," Silva told Reuters.

The refinery faced temporary closure in May last year due to a delay in crude shipments and in November after the government canceled two shipments.

Sri Lanka may have to order additional refined products if it fails to secure required crude. (Writing by Shihar Aneez; editing by Jason Neely)

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