COLOMBO, Jan 22 Reuters Sri Lanka39;s foreign minister said on Wednesday that the South Asian island nation had signed an agreement with Chinese state energy giant Sinopec to fasttrack a proposed 3.7 billion oil refinery in its southern port city of Hambantota.

Sinopec and Sri Lanka will jointly decide the share of refined fuel that will be exported from the facility, Foreign Minister Vijitha Herath told reporters.

This is one of the largest foreign investment projects Sri Lanka has received and we feel it will be important for us, Herath said.

This refinery has been discussed between the two countries for many years and we are committed to taking it forward. We hope to break ground as soon as possible.

He declined to provide details on the planned capacity of the refinery.

A Sinopec representative in China did not respond immediately to a request for comment and its Sri Lanka office did not answer phone calls.

Sri Lanka is currently completely dependent on imported oil, which costs the cashstrapped country billions of dollars every year, though it does have some smaller refineries.

The country is looking to attract foreign investment to stabilise its economy which crumpled under a severe foreign exchange crisis in 2022. Sri Lanka posted a fasterthanexpected rally after securing a 2.9 billion International Monetary Fund IMF programme in 2023.

Sinopec and Sri Lanka will work to resolve land, tax and water issues within a month, Herath said, adding that Colombo…