Sri Lanka will build a second refinery in a tie-up with Indian companies, its energy minister Chandima Weerakkody said on Thursday, a move that would strengthen New Delhi's engagement with Colombo, Mumbai Mirror said citing Reuters.

"We are refurbishing our existing refinery as well, and we are moving towards our second refinery jointly with India," Weerakkody told Reuters.

Weerakkody is in India as part of the Sri Lankan Prime Minister Ranil Wickremesinghe's delegation for bilateral talks between the two countries this week.

The energy minister said the capacity of the refinery and the cost of the project have yet to be decided.

Weerakkody also said his New Delhi counterpart Dharmendra Pradhan on Thursday indicated that the Indian government has agreed to convert a 500 megawatt coal power plant in the eastern port city of Trincomalee to natural gas.