Colombo: Sri Lanka Thursday formally signed an agreement with India to jointly redevelop a strategic World War II-era oil tank farm in the island nation’s eastern port district of Trincomalee. energy minister Uday Gamanpila The agreement to develop the strategic Trincomalee Oil Tank Complex, commonly known as the Trincomalee Oil Tank Farm, was signed this evening.
He said the signatories included the Secretary of the Treasury to the Government of Sri Lanka, the Land Commissioner General, Ceylon Petroleum Corporation, the local operator of the Indian Oil Company (LIOC) and the newly formed Trinco Petroleum Terminal Ltd.
Gammanpila insisted that 85 of the 99 tanks would now be under Sri Lanka’s control, which had previously been under Indian control.
“Congratulations to all parties for signing the agreement to develop a new milestone in the India-Sri Lanka economic and energy partnership!! Trincomalee Oil Tank Farm, The Indian High Commission in Colombo tweeted, “I sincerely appreciate the guidance of the leadership of India and Sri Lanka and the support of all concerned ministers and officials.”
Earlier this week, the Lankan government said that after reviewing three existing agreements with the Indian government regarding the Trinco oil tank farm, the two sides have reached an agreement to implement a joint development project.
The cabinet has approved the proposal to allot 24 and 14 oil tanks of Trincomalee Oil Tank Complex to local operators of Ceylon Petroleum Corporation (CPC) and Indian Oil Company (LIOC), while the remaining 61 oil tanks will be developed under Trincomalee. Have to go Terminal Pvt. Ltd., with shares of CPC (51%) and LIOC (49%).
Joint cabinet spokesperson (minister) Uday Gammanapila had said that the joint venture would be for a lease period of 50 years.
The deal has been signed amid protests by nationalist Buddhist monks, opposition groups and petroleum trade unions. Some of them have vowed to approach the judiciary to quash the deal.
The trade unions claimed at a press briefing here on Thursday that the move would eventually facilitate Indians to take full control of the tanks.
The new agreement will be an extension of the Indian Oil Company, LIOC’s 2002 agreement with local operators.
Sri Lanka signed an original deal with India in 2002 on the island’s most strategic oil storage complex, which was used as a supply base during World War II.
India had always shown a strategic interest in the Trincomalee Tank Farm which was built by the British rulers to refuel Allied warships and aircraft.
In October, President Gotabaya Rajapaksa told Foreign Secretary Harsh Vardhan Shringla That Indian investors are invited to invest in the island nation and that Sri Lanka was keen to resolve the situation regarding the Trincomalee oil tanks in a way that is beneficial to both countries.
The World War II-era oil storage facility with a capacity of about 8 million barrels of oil, located in Trincomalee’s strategically advantageous port district, has been a key bilateral economic partnership link for decades.
Since 2003, Lanka IOC, a Sri Lankan subsidiary of India’s leading oil company Indian Oil Corporation (IOC), has the right to lease 99 tanks for a period of 35 years for an annual payment of USD 100,000 .
Shringla had also visited the oil storage site during his visit to Sri Lanka. The visit assumes significance as oil sector trade unions in the country have demanded that the tanks be brought under the control of state fuel arm Ceylon Petroleum Corporation (CPC).
The formalization of the agreement comes in the backdrop of Sri Lanka seeking India’s help to tide over its current economic crisis arising out of the ongoing foreign exchange crisis in the local economy.
The Sri Lanka-India oil tank storage venture comes amid growing concern over the growing Chinese influence in the country.
Officials said the island nation has closed its only refinery over its inability to pay for crude and is negotiating a credit line with India for fuel purchases.
He said the signatories included the Secretary of the Treasury to the Government of Sri Lanka, the Land Commissioner General, Ceylon Petroleum Corporation, the local operator of the Indian Oil Company (LIOC) and the newly formed Trinco Petroleum Terminal Ltd.
Gammanpila insisted that 85 of the 99 tanks would now be under Sri Lanka’s control, which had previously been under Indian control.
“Congratulations to all parties for signing the agreement to develop a new milestone in the India-Sri Lanka economic and energy partnership!! Trincomalee Oil Tank Farm, The Indian High Commission in Colombo tweeted, “I sincerely appreciate the guidance of the leadership of India and Sri Lanka and the support of all concerned ministers and officials.”
Earlier this week, the Lankan government said that after reviewing three existing agreements with the Indian government regarding the Trinco oil tank farm, the two sides have reached an agreement to implement a joint development project.
The cabinet has approved the proposal to allot 24 and 14 oil tanks of Trincomalee Oil Tank Complex to local operators of Ceylon Petroleum Corporation (CPC) and Indian Oil Company (LIOC), while the remaining 61 oil tanks will be developed under Trincomalee. Have to go Terminal Pvt. Ltd., with shares of CPC (51%) and LIOC (49%).
Joint cabinet spokesperson (minister) Uday Gammanapila had said that the joint venture would be for a lease period of 50 years.
The deal has been signed amid protests by nationalist Buddhist monks, opposition groups and petroleum trade unions. Some of them have vowed to approach the judiciary to quash the deal.
The trade unions claimed at a press briefing here on Thursday that the move would eventually facilitate Indians to take full control of the tanks.
The new agreement will be an extension of the Indian Oil Company, LIOC’s 2002 agreement with local operators.
Sri Lanka signed an original deal with India in 2002 on the island’s most strategic oil storage complex, which was used as a supply base during World War II.
India had always shown a strategic interest in the Trincomalee Tank Farm which was built by the British rulers to refuel Allied warships and aircraft.
In October, President Gotabaya Rajapaksa told Foreign Secretary Harsh Vardhan Shringla That Indian investors are invited to invest in the island nation and that Sri Lanka was keen to resolve the situation regarding the Trincomalee oil tanks in a way that is beneficial to both countries.
The World War II-era oil storage facility with a capacity of about 8 million barrels of oil, located in Trincomalee’s strategically advantageous port district, has been a key bilateral economic partnership link for decades.
Since 2003, Lanka IOC, a Sri Lankan subsidiary of India’s leading oil company Indian Oil Corporation (IOC), has the right to lease 99 tanks for a period of 35 years for an annual payment of USD 100,000 .
Shringla had also visited the oil storage site during his visit to Sri Lanka. The visit assumes significance as oil sector trade unions in the country have demanded that the tanks be brought under the control of state fuel arm Ceylon Petroleum Corporation (CPC).
The formalization of the agreement comes in the backdrop of Sri Lanka seeking India’s help to tide over its current economic crisis arising out of the ongoing foreign exchange crisis in the local economy.
The Sri Lanka-India oil tank storage venture comes amid growing concern over the growing Chinese influence in the country.
Officials said the island nation has closed its only refinery over its inability to pay for crude and is negotiating a credit line with India for fuel purchases.
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