• Over a year since TPTL invited EOIs; Govt. yet to decide
• 2 tanks completed; total upgrade expected to take 18 months
• Floating buoy system being installed; final costs pending tender

The Government is yet to decide whether it will proceed with the previous administration’s Expression of Interest (EOI) or call for new EOIs internationally from strategic investors for the joint development of the Trincomalee Oil Tank Farm in partnership with Trinco Petroleum Terminal Ltd. (TPTL), The Sunday Morning reliably learns. 

It has been over a year since TPTL invited EOIs. In July last year, TPTL, a Joint Venture (JV) between the Ceylon Petroleum Corporation (CPC) and Lanka IOC (LIOC) under the Ministry of Power and Energy, invited EOIs from eligible investors and consortia to develop 61 tanks in the Upper Tank Farm at China Bay, Trincomalee, on a Build, Operate, and Transfer (BOT) basis. 

The project, facilitated by the National Agency for Public-Private Partnership (NAPPP), leverages Trincomalee’s strategic location on Sri Lanka’s east coast near major shipping routes to India, Bangladesh, and beyond, as well as its status as one of the world’s largest natural deep-water harbours.

The China Bay tank farm comprises 100 steel tanks, each with a capacity of 10,000 MT, across 325.5 hectares, with 61 tanks leased to TPTL for 50 years to be refurbished and modernised as a strategic petroleum terminal, with potential expansion into surrounding land. 

Investors with a minimum commitment of nine tanks were required to submit EOIs by 5 July 2024, including company profiles and annual reports for the past three years, and outline proposals with revenue models, relevant project experience, and supporting documents. 

When contacted by The Sunday Morning, Ministry of Energy Secretary Prof. Udayanga Hemapala said that steps were being taken to renovate the 20 tanks owned by the CPC. 

Regarding the JV, he said: “For the renovation under TPTL, a huge investment is needed and the Government decision on whether it should go ahead with the previous EOI or not is still pending.” 

CPC Managing Director Dr. Mayura Neththikumarage confirmed to The Sunday Morning that the renovation of the 24 tanks owned by the CPC was ongoing, with two tanks already completed. 

He added that the work included upgrades to the pipeline and the jetty system to accommodate larger ships, a critical component for future operations. The total renovation is expected to take at least 18 months to complete. 

The CPC is managing the project internally, using a phased procurement approach for individual construction contracts while adhering to Government-approved procurement guidelines. 

Regarding the 61 tanks leased to TPTL, Dr. Neththikumarage said: “The previous EOI called for an investor to renovate the tanks and find users for the facility. The CPC is now evaluating whether this model remains suitable or if it would be better to directly invest in the project, allowing the corporation to recover costs and interest margins. Once we secure the investment, we can sell storage capacity directly to real users such as oil traders and manufacturers, rather than relying on an intermediate investor.”

He stressed that a committee including the CPC and LIOC representatives was reviewing the previous business model to address technical and financial drawbacks. “The evaluation period does not impact the ongoing development of the 24 tanks, which continues as planned,” he noted.

On the infrastructure side, Dr. Neththikumarage stated that upgrades to the jetty system were underway. “The project involves a floating buoy system at the deep-water unloading point in Trincomalee to handle larger vessels, complementing existing infrastructure. Preliminary estimates for the ongoing upgrades are around $ 70 million, though final costs will be confirmed once upcoming tenders are published in the next few weeks.” 

The CPC Managing Director explained that the CPC would oversee project management, while individual construction contracts would be awarded in stages under strict Government procurement guidelines.