Sri Lanka to jointly develop Trinco upper oil tanks with Lanka IOC
ECONOMYNEXT – Sri Lanka will jointly develop a tank farm in Trincomalee with Lanka IOC, a publicly traded unit of Indian Oil Corporation, Petroleum Minister Udaya Gammanpila said.
Lanka IOC already has some tanks to store oil.
The tanks built by the Imperial British administration during the World War II, were unused for over a half a century until an administration headed by then-Prime Minister Ranil Wickremesinghe invited Indian oil to be a fuel distributor with one-third ownership of common user facilities.
“I would like to say gratefully that the Indian High Commissioner in Colombo was flexible to accept the conditions we put forward after discussing with the management and unions (of Ceylon Petroleum Corporation),” Minister Gammanpila told a public ceremony.
“Most ships bypassing Trincomallee belong to India. To win that market it is necessary for us to have the co-operation of India.
“So with the co-operation of Lanka IOC, we promise the nation to develop these tanks and make this a place to earn a large amount of foreign exchange for Sri Lanka.”
Sri Lanka is now facing severe foreign exchange shortages after unprecedented money printing to keep down interest rates.
“India and Sri Lanka have identified energy partnership as one of the priority dimensions of their cooperation,” a spokesman for the Indian High Commission said.
“India is committed to working together with Sri Lanka for the island’s energy security.
In this context, consultation and discussions have been undertaken to promote mutually beneficial cooperation for development and operation of the Upper Oil Tank Farms in Trincomalee.”
We look forward to continuing our productive engagement with Sri Lanka in this regard”
Lanka IOC used at least 14 tanks in the Lower Tank Farm. There are around 84 in the Upper Tank Farm which is overgrown in the jungle and is a habitat for wild animals.
Some are rusted in various stages and require investment according to industry analysts.
Minister Gammanpila said the Indian High Commission had agreed to the proposal despite some provisions in a 2017 agreement signed with India.
Sri Lanka has gone back on a promise to allow Indian investment into the partially built East Container Terminal and instead said it is offering a Greenfield terminal.
However, India has protested the move. (Colombo/Feb18/2021-sb)