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Friday January 21st, 2022
Economy

Sri Lanka signs Trinco oil tank farm deal with India’s LIOC

ECONOMYNEXT – Sri Lanka’s state-run Ceylon Petroleum Corporation (CPC) signed an agreement with Lanka IOC, a subsidiary of state-owned Indian Oil Corporation, on Thursday (06) to jointly develop the Trincomalee oil tank farm, Energy Minister Udaya Gammanpila said.

The agreement sees the establishment of Trinco Petroleum Terminals Ltd, a joint venture between the two companies set up to manage 61 of the 99 tanks. The CPC holds a 51 percent controlling stake in the company, while LIOC owns 49 percent.

“A new milestone in India-Sri Lanka economic and energy partnership!! Congratulations to all parties on signing the Agreement to develop Trincomalee Oil Tank Farms. Sincerely appreciate the guidance from leadership of India and Sri Lanka and support from all Ministers and officials concerned (sp),” the Indian High Commission in Colombo tweeted Thursday evening.

Minister Gammanpila told a cabinet press briefing on Tuesday (04) that a majority of the 99 tanks will be in Sri Lanka’s control, with 24 under the direct control of the state-run Ceylon Petroleum Corporation (CPC), and the remaining 61 to be brought under the Trinco Petroleum Terminal Ltd.

Gammanpila said the chairman of the new company, as well as four out of its seven board members will all be appointed by the CPC. The company will be subject to government scrutiny and can be questioned by parliament committees, he said.

“The agreement to take take control of majority of oil tanks which were hitherto under the Lanka IOC in the Trincomalee Oil tank farm development project was signed at the finance ministry on 2022.01.06 at the Finance Ministry,” the Energy Minister said in a statement.

“The agreement will be submitted to the cabinet on January 10 and to the parliament on January 18.”

According to the statement, Finance Ministry Secretary S R Attygala, CPC chairman Sumith Wijesinghe, and CPC Managing Director Buddika Madihahewa signed the agreement on behalf of the Sri Lankan government while Manoj Gupta, the MD of LIOC signed on behalf of LIOC.

Gammapila said India was given the tanks for India’s use in 2003 under the then United National Party (UNP) government of Prime Minister Ranil Wickremesinghe through a memorandum of understanding for 35 years.

As a result of the agreement, the minister said, 75 of the 99 tanks will effectively come under government control for 34 years.

The Trincomalee oil tank farm was built by the British during World War II as a refuelling station, located in ‘China Bay’ in close proximity to the internationally coveted deep water natural harbour of Trincomalee. (Colombo/Jan06/2021)

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