Sri Lanka to construct three new fuel storage tanks at Muthurajawela
Daily FT: The Cabinet of Ministers approved the award of a contract for the construction of three new fuel storage tanks at the Muthurajawela Terminal, with the project to be funded through the Ceylon Petroleum Terminal Company (CPSTL).
The project involves the construction of two fuel storage tanks with a capacity of 15,000 cubic metres each and one tank with a capacity of 10,000 cubic metres.
The Cabinet had previously approved the project at its meeting on 2 June 2025. However, at a subsequent meeting held on 20 July 2026, the Cabinet directed the Energy Minister and the Environment Minister to consult relevant stakeholders and determine the measures required to ensure compliance with environmental, legal and other requirements before proceeding with the project.
Following those consultations, the Energy Minister and Environment Minister informed the Cabinet that the recommendations and conditions imposed by the Central Environmental Authority (CEA) had been incorporated into the procurement contract.
The Ministers also confirmed that the project would be implemented in accordance with the provisions of the Fauna and Flora Protection Ordinance, ensuring that the necessary environmental and wildlife-related requirements are observed.
Based on these assurances, the Cabinet of Ministers approved a proposal submitted by the Energy Minister Anura Karunathilake to award the contract to Indo-East Engineering & Construction (Lanka) Ltd., and Ceylex Engineering Ltd., joint venture.
The approved contract is valued at $ 3.04 million, (excluding VAT), and Rs. 2,796.14 million (excluding VAT).
“The joint venture was identified as the lowest bidder recommended by the High-Level Procurement Committee following an International Competitive Bidding process,” Cabinet Spokesman and Minister Dr. Nalinda Jayatissa said at the weekly post-Cabinet meeting media briefing yesterday.
He said the investment is expected to expand fuel storage capacity at the Muthurajawela Terminal and strengthen the country’s petroleum storage infrastructure.
OSL take:
Sri Lanka’s growing economic activity and rising demand for energy are creating new business/investment opportunities for foreign businesses/investors as the country moves to strengthen its energy infrastructure. The Cabinet’s approval of a contract to construct three new fuel storage tanks at the Muthurajawela Terminal highlights the scale of investment required to support the country’s expanding energy needs. Beyond petroleum infrastructure, Sri Lanka’s energy sector offers business/investment opportunities across renewable energy, power generation, energy storage, fuel logistics, transmission infrastructure and energy-efficiency technologies. The country’s push to diversify its energy mix and expand infrastructure is particularly significant for international investors with expertise in solar, wind, battery storage and other clean-energy technologies. Business/investment opportunities are also emerging in supporting industries, including engineering, construction, logistics and energy-related services. Sri Lanka’s strategic location along major regional shipping routes further strengthens its potential as an energy and logistics hub in the Indian Ocean. As economic activity expands and the Sri Lankan Government continues to modernise the energy sector, the need for new infrastructure and technology is expected to grow. For foreign investors, this creates opportunities to participate not only in individual projects but also in the long-term transformation of Sri Lanka’s energy sector.
| Article Code : | VBS/AT/20260817Z_3 |