Last week, Sri Lanka’s Energy Minister Udaya Gammanpila announced that the Indian Oil Subsidiary Lanka IOC would be given 49% stake in the joint development of the Trincomalee Oil Tank farm, with Ceylon Petroleum Corporation keeping 51%.
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The CPC has formed a special purpose company, Trinco Petroleum Terminals Ltd, and it is expected to get Cabinet approval this week.
If it goes according to plan India and Sri Lanka would have finally achieved the implementation of an agreement — contained in an exchange of letters between then Prime Minister Rajiv Gandhi and Sri Lankan President J R Jayewarndene as part of the annexure to the India-Sri Lanka Accord of July 29, 1987 — that the tank farm would be developed jointly.
Why Trincomalee matters? The pre-WWII era oil storage facility has a capacity of nearly 1 million tonnes, which far outstrips the demand in Sri Lanka. Located inland from China Bay, the facility was meant to be serviced by the natural harbour at Trincomalee.
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