Despite the signing of a trilateral Memorandum of Understanding (MOU) between Sri Lanka, India, and the United Arab Emirates (UAE) to develop Trincomalee as a strategic energy hub, no progress has been made on key initiatives, including the refinery project, Trincomalee Tank Farm refurbishment, bunker fuel initiatives, the joint venture company, or the proposed bi-directional petroleum pipeline, The Sunday Morning learns.
According to Ministry of Energy Secretary Prof. Udayanga Hemapala, discussions on these projects have not taken place yet.
“Soon after the signing of the MOU, the immediate next step under this MOU was to identify and nominate specific implementing agencies — whether Government bodies, private sector firms, or affiliated institutions — that will carry out the business-to-business components of the agreement. And then the actual projects were supposed to be developed and discussed in detail by these designated entities from all three nations,” he said.
Despite Indian Prime Minister Narendra Modi publicly highlighting the pipeline agreement and the broader Trincomalee energy hub initiative, Sri Lankan authorities remain uncertain about the project’s development.
Sources indicate that the Sri Lankan Government has held only one meeting regarding the pipeline since the new administration came into power, limited to the Energy Committee, which includes key figures from the country’s energy sector.
During a recent press conference with President Anura Kumara Dissanayake, Indian Prime Minister Modi emphasised the benefits of the multi-product pipeline and other energy initiatives, including the grid interconnectivity agreement, which he said would create opportunities for Sri Lanka to export electricity.
Modi also noted India’s support for projects like the Sampur Solar Power Plant, the 5,000 solar rooftop systems for religious places, and the Sri Lanka Unique Digital Identity project.
However, despite public statements and MOUs, no financial feasibility studies have been conducted for the multi-product pipeline, raising concerns over the project’s viability. Earlier reports highlighted that the proposed pipeline, connecting Nagapattinam in India with the Trincomalee Oil Tank Farm and Colombo, would include a minimum purchase clause obligating Sri Lanka to import a specified volume of petroleum from India, creating potential financial liability for the country.
The groundwork for this collaboration stems from the existing partnership between Ceylon Petroleum Storage Terminals Ltd. (CPSTL) and Lanka IOC (LIOC) in Trincomalee, which has expanded energy cooperation between the two nations. Initial proposals envisioned the pipeline facilitating both the import and export of petroleum products, with suggested routes through Muthurajawela and Trincomalee.