The agreement signed between Sri Lanka and India to jointly develop the Oil Tank Farm in Trincomalee was tabled in Parliament by Minister of Energy Udaya Gammanpila today (February 08).
On January 03, the Cabinet of Ministers gave the go-ahead to the proposal calling for the implementation of the Trincomalee Oil Tank Farm development project with India.
Three days later, Sri Lanka inked a quadripartite agreement with India to jointly develop the Trincomalee Oil Tank Farm. It was signed at the Finance Ministry on January 06, with the Government of Sri Lanka, the Ceylon Petroleum Corporation (CPC), Lanka IOC and the subsidiary company Trinco Petroleum Terminal Pvt. Ltd. as the signatories.
On January 12, the Energy Minister had publicized the full agreement inked between Sri Lanka and India.
As per the 38-page agreement, 61 tanks at the oil storage complex are jointly developed by the CPC and Lanka IOC as a joint venture. Lanka IOC is a subsidiary of the Indian Oil Corporation which is under the ownership of India’s Ministry of Petroleum and Natural Gas.
In the subsidiary company named Trinco Petroleum Terminal Pvt. Ltd., established for the joint development of these 61 of these oil tanks, the CPC retained 51% while Lanka IOC held 49% of the issued shares of the joint venture company.
Sri Lanka and India reached an agreement to implement a project to jointly develop Trincomalee Oil Tank Farm, after reviewing three existing deals between the countries through diplomatic talks.
The two countries had agreed to jointly develop and operate the farm, which consists of 99 tanks, more than three decades ago but the entire farm was leased to India in 2003 for 35 years and Sri Lanka was unsuccessful in taking part of the farm as a sublease from Indian state-controlled IOC’s subsidiary Lanka IOC in 2017.
Meanwhile, the Lanka IOC-run 14 oil tanks of the Lower Oil Tank Complex were further leased out to the company for its business activities.
Additionally, 24 oil tanks were allocated for the business activities of the CPC as approved by the Cabinet. – ada derana