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As Lanka seeks fuel from India, Modi pushes for oil tank farm and joint energy projects
View(s):By Damith Wickremasekera
Indian Prime Minister Narendra Modi urged President Anura Kumara Dissanayake during a phone conversation this week to expedite the energy sector projects agreed upon between the two countries, particularly the work on the joint venture to develop the Trincomalee oil tank farm.
The prodding came when President Dissanayake called Mr Modi to request rescue supplies from India’s IOCL (Indian Oil-Lanka). The government had asked for Indian government intervention to release 38,000 metric tonnes of fuel that had been held up by IOCL due to disruptions in fuel supplies after the closure of the Strait of Hormuz.
Mr Modi told the Sri Lankan President that the project would be mutually beneficial and would ensure Sri Lanka’s energy security as well as increase the country’s storage capacity.
Under a 2023 joint venture Trinco Petroleum Terminal (Pvt) Limited agreement between Sri Lanka’s Indian Oil Corporation and the Ceylon Petroleum Corporation (CPC), 61 tanks in all are to be developed, with nine in the first phase. However, work on the project has been stalled for several years even though the agreement is in force.
“The renovation of each tank will cost around USD 1.2 million, with the entire project to cost around USD 75-100 million,” Foreign Affairs Minister Vijitha Herath said. The matter had been discussed during talks he held with India’s External Affairs Minister S. Jaishanker.
Mr Herath told the Sunday Times that a special cabinet paper would be submitted shortly to expedite the project and call for tenders to renovate the oil tanks.
“This project will ensure that domestic supply will be stable while India can use the facility for bunkering or for exporting products from here,” he said.
In the joint India-Lanka statement issued following President Dissanayake’s visit to India in December 2024, the two sides acknowledged ongoing cooperation in the development of Trincomalee Tank Farms, with both leaders deciding to support the development of Trincomalee as a regional energy and industrial hub.
Meanwhile, a shipment of 38,000 MT of petroleum products – 20,000 MT of diesel and 18000 MT of petrol – from India arrived in Colombo today.
“Lanka IOC had earlier secured fuel supplies for March from the Middle East and Singapore. However, suppliers with whom the contracts were placed expressed their inability to deliver the product and invoked force majeure in view of supply disruptions and vessel unavailability due to the ongoing conflict in the Middle East,” the Indian High Commission said in a statement yesterday.
“Due to the above disruptions, rescue supplies were requested from India from IOCL. The current shipment of 38,000 MT is part of these supplies. The Government of India, through Lanka IOC, has extended support to Sri Lanka for maintaining continuity of fuel supply,” the statement said.
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