Sri Lanka will soon ink a deal with India to jointly develop the Trincomalee oil tank farm.
India and Sri Lanka have been negotiating this project for 16 months.

Sri Lanka’s Energy Minister Udaya Gammanpila has instructed the Ceylon Petroleum Corporation (CPC) to form a subsidiary company for this purpose. The subsidiary company will be called Trinco Petroleum Terminal Ltd.

This move follows President Gotabaya Rajapaksa’s approval for setting up a special purpose vehicle.

Trincomalee oil tank farm was built by the British during the Second World War to serve as a refuelling station. This oil storage facility was built adjacent to the Trincomalee port, one of the deepest natural harbours in the world. However, oil tanks need to be refurbished to be fit for use again, at the cost of millions of dollars.

The proposal to refurbish the oil farm was envisaged 35 years ago, in the Indo-Lanka accord of 1987. This accord states that, “work of restoring and operating the Trincomalee oil tank farm will be undertaken by India and Sri Lanka, as a joint venture”. Despite this Accord, work barely moved until 2003. In 2003, Indian Oil Corporation set up its Sri Lankan subsidiary called Lanka IOC which has the leasing rights to 99 tanks at the facility.
About Trincomalee Oil Tank Farm

The Trincomalee Oil Tank Farm is located in ‘China Bay’. It comprises of 99 storage tanks, with a capacity of 12,000 kilolitres each, spread across Lower Tank farm and Upper Tank Farm. Currently, Lanka IOC runs 15 tanks. The new agreement is being negotiated for the remaining tanks. Indian Oil Corporation will work with the Ceylon Petroleum Corporation (CPC) for developing the Upper Tank Farm.