Sri Lanka to go ahead with Indian JV on Trincomalee Oil Tank Farm

Sri Lanka will continue a joint venture with India to develop Trincomalee Oil Tank farm aiming to earn more foreign exchange to the country, Energy Minister Kumara Jayakady said.

Contrary to strong protests by Marxists Janatha Vimukthi Peramuna (JVP), the key coalition partner of the ruling National People’s Power (NPP), the government will go ahead with the plan signed under the previous government.

The agreement for the Trinco Petroleum Terminal (Pvt) Ltd (TPTL) between the state-owned Ceylon Petroleum Corporation (CPC) and Lanka IOC, a subsidiary of Indian Oil Corporation, was signed in January 2022 when the island nation was grappling with a financial crisis before Colombo declared sovereign debt default.

The TPTL had originally planned to invest up to $70 million in refurbishing 51 oil tanks in the Oil Tank Farm which has 99 tanks with the capacity of 10,000 metric tons each, built in the World War II era in a 600 acre land adjacent to Trincomalee port in Eastern Sri Lanka.

Out of the 99 tanks, 15 are operated by Lanka IOC while the balance is expected to be used by CPC.

The Department of Government Information in a statement said efforts are being made to earn a huge amount of foreign exchange for the country through the Trincomalee Oil Tank Farm in line with the new government’s energy policy and programs.

“For this, the Lanka IOC and the Ceylon Petroleum Corporation are working together. So the Trinco Petroleum Terminal Ltd, a joint venture between India and Sri Lanka, is being implemented through the company,” Energy Minister Jayakady was quoted as saying.

The phase 1 of the joint venture project was estimated to cost between $15-20 million and was to be completed in 2023.

However, Sri Lanka’s unprecedented economic crisis delayed the project amid protests by JVP.

Former Energy Minister Kanchana Wijesekera has said the tanks owned by CPC in Trincomalee Oil Tank Farm cannot be developed because of a clause in the agreement with India.

President Anura Kumara Dissanayake promised to cancel the deal with India when it was signed.

Minister Jayakody during an inspection tour of the Trincomalee Port Oil Tank Farm said the tanks, which were built during the British era, are in good condition.

He said with necessary minor renovations and the construction of the pipeline network, it will develop to supply bunkering oil for ships in corporation with the Ministry of Transport, Highways, Ports and Civil Aviation along with the development of Trincomalee harbor, which is considered as one of the top natural port in the world.