Plans are underway to open the controversial Trincomalee Oil Tank Farm to new investors through a proposed joint venture between Sri Lanka, India, and the United Arab Emirates (UAE).
The move is part of a broader effort to position the Trincomalee Port as a regional energy hub and attract foreign exchange to the country, The Sunday Morning learns.
It is learnt that a committee will be appointed to develop a detailed business proposal to assess the viability of the project.
If deemed feasible, a joint venture company will be established, with the Ceylon Petroleum Corporation (CPC), Lanka IOC (a subsidiary of Indian Oil Corporation Ltd.), and a UAE-based firm as core partners.
The facility will be operated as a common user terminal, providing services to multiple companies, while creating opportunities for other investors to participate in the future.
Speaking to The Sunday Morning, CPC Managing Director Dr. Mayura Neththikumarage said the strategy was to develop a fully operational energy hub that would encourage additional investments once the infrastructure was in place.
“When it’s like a jungle, nobody comes. But once operations begin and a proper hub is established, other investors will follow,” he said.
The proposed Trincomalee project is expected to attract further private sector participation once the initial joint venture is operational, contributing to the long-term modernisation of the country’s energy infrastructure, according to Neththikumarage.
This initiative comes amid continued political debate over foreign involvement in national energy infrastructure. Opposition parties have voiced concerns over the leasing of the Trincomalee Port and oil tanks to India. Despite these protests, the Government maintains that the project is essential for economic recovery.
President Anura Kumara Dissanayake, addressing the issue during a televised debate programme, clarified that no final agreement had been signed with India. “What we have signed is a Memorandum of Understanding (MOU) to explore the potential and prepare a business plan. Only if all parties agree to the plan will a formal agreement be signed,” the President said.
He stressed the strategic value of the Trincomalee Port, calling it one of the finest natural harbours in the world, capable of accommodating large vessels close to shore.
The port area houses 99 oil tanks, each with a capacity of around 12,500 MT. At present, 24 tanks are controlled by the CPC and 12 by Lanka IOC, while the rest remain largely underutilised.
The agreement for Trinco Petroleum Terminal Ltd. (TPTL), a joint venture between the CPC and Lanka IOC, was initially signed in January 2022, at the height of the country’s financial crisis. The project had planned a $ 70 million investment to refurbish 51 tanks, although progress was delayed due to the economic downturn and political opposition.
Meanwhile, Energy Minister Kumara Jayakody recently reaffirmed the Government’s commitment to moving forward with the project.
He said minor renovations and the construction of a pipeline network would prepare the terminal to support bunkering operations for ships, in collaboration with the Ministry of Transport, Highways, Ports, and Civil Aviation.
Meanwhile, President Dissanayake reassured that the CPC would continue to procure fuel through a competitive tender process, ensuring no monopolies in the market. He also pointed to the $ 3 billion refinery investment by China’s Sinopec in Hambantota as evidence of Sri Lanka’s open policy for multiple international energy partnerships.