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Trinco Petroleum Terminal starts tank redevelopment

11 Sep 2022

  • JV phase 1 with CPC begins: LIOC 
  • Redevelopment of 10 tanks involves $ 25-30 m investment
  • Detail-specific report pending from PricewaterhouseCoopers 
By Shenal Fernando The first phase of the Trinco Petroleum Terminal (Pvt) Ltd. (TPTL) – Lanka Indian Oil Company’s (LIOC’s) Joint Venture (JV) with the Ceylon Petroleum Corporation (CPC) – for the redevelopment of 61 tanks of the Trincomalee Oil Tank Farm in China Bay has commenced, according to LIOC. This project involves the initial redevelopment of 10 tanks and is estimated to involve an investment of around $ 25-30 million.  Speaking to The Sunday Morning Business LIOC Managing Director Manoj Gupta revealed that development activities of phase one had already commenced and that they were nearing completion with regard to site clearance, following the removal of all shrubs and grass. Currently approval is being awaited from the State Timber Corporation to cut down the larger trees.  He further revealed that the TPTL had floated the tender to carry out a health assessment of the 10 tanks. He further stated: “We have just awarded the work order for carrying out the detailed specificity report to PricewaterhouseCoopers. Once we receive it we can complete the business plan.” Responding to a query on the timeline for completion of phase one, Gupta claimed that TPTL was currently doing its best to complete phase one as fast as possible, but refrained from providing a specific date for completion.  The Trincomalee Oil Tank Development Complex Project was approved by the Cabinet of Ministers on 4 January. Accordingly, it was decided that 24 of the 99 tanks would be given to the CPC, 14 tanks to LIOC, and 61 tanks to TPTL – the latter on a 50-year lease, with CPC having the majority stake in the subsidiary.  Consequently, LIOC and CPC entered into an agreement on 6 January 2022 for the joint development of the 61 tanks held by Trinco Petroleum Terminal as a JV. CPC holds a 51% stake in the company while LIOC holds a 99% stake. The Trincomalee Oil Tank Farm, built by the British as a refuelling station during World War II, is located on 850 acres of land and originally contained 101 tanks, each with the capacity to hold 12,100 MT of oil.  Out of the original 101 tanks, two were destroyed in a kamikaze attack during a Japanese air raid on Trincomalee on 9 April 1942 and when a Royal Ceylon Air Force plane crashed in the early 1960s. LIOC acquired a one-third stake in Ceylon Petroleum Storage Terminals Ltd., which operated the Trincomalee Oil Tank Farm in 2003. Subsequently, LIOC entered into a Memorandum of Understanding (MoU) with CPC for a 35-year lease to operate 32 of the 99 oil tanks for an annual payment of $ 100,000. However, the two parties were unable to finalise this 35-year lease due to strong opposition by trade unions and political parties.  


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