The Iranian President Mahmoud Ahmadinejad during bilateral talks with President Mahinda Rajapaksa yesterday, assured the release of funds to expand the Sapugaskanda oil refinery as soon as possible.

He stated that it has been delayed due to technical reasons but assured to resolve the issues soon, news360.lk reported.

Iran will provide funds of around US $ 1 billion to expand and upgrade the Sapugaskanda oil refinery and the relevant agreement was signed in April 2008.

Once completed Sapugaskanda refinery will be able to refine around 100,000 barrels of crude oil per day from the current 50,000 barrels per day, saving millions of dollars in foreign exchange spent on importing finished petroleum products, the report added.

The existing refinery in Sapugaskanda built in 1969 is a Hydro-Skimming Refinery and under the expansion programme the new conversion processes will be added to upgrade residual oil which has low market value, news360.lk reported.