Sri Lanka’s CPC’s Rs. 7 billion renovation to boost energy security
The Morning: Sri Lanka expects to invest Rs. 7 billion for the renovation of the 21 oil tanks owned by Ceylon Petroleum Corporation (CPC) at the Trincomalee oil tanks, the Ministry of Energy said.
In a response tabled at Parliament last month to an opposition query, the Ministry of Energy said that the government expects to invest Rs. 7,010 million for the renovation of 21 oil tanks owned by the CPC among the Trincomalee oil tanks.
CPC owns a total of 24 oil tanks from the 99 oil tanks in Trincomalee, where they had leased out three oil tanks for Prima Lanka (Pvt) Ltd. in 2001 for Rs. 100 each for a five-year period, where CPC gets Rs. 3,600 as annual lease payments from the three oil tanks, Ministry of Energy revealed.
The proposal to develop 24 tanks at the Upper Tank Yard in Trincomalee under the CPC got cabinet nod in March this year.
Sri Lanka Government, CPC, Ceylon Indian Oil Company, and Trincomalee Petroleum Terminal Company signed an agreement in January 2022 for the ownership, development, and utilisation of the China Port Oil Tank.
As per the provisions of that agreement, 24 tanks at the Upper Tank Yard in Trincomalee had been leased to CPC for 50 years from the date of commencement of the agreement.
The CPC has planned a three-year project and conducted initial project activities, inclusive of a feasibility study, to complete the development of the said oil tanks within three years.
If the CPC oil tanks are brought back into operational status, it would be a much-welcomed boost to Sri Lanka’s energy security, as the tanks will offer a significant increase in storage of crude oil or petroleum products like diesel and petrol.
OSL take:
Sri Lanka’s ongoing expansion has resulted in an increase in demand in the country’s energy industry. As Sri Lanka has become an emerging business destination in the South Asian region, the demand for energy in the country has seen a steady growth. Sri Lankan authorities have opened the country’s retail fuel market to enable foreign players to also enter. With the increase in demand for energy, there are emerging business/investment opportunities in the energy industry. These opportunities also include the development of infrastructure and supplementary infrastructure development facilities to help with the expanding industry. It is in such a backdrop that the Sri Lankan government is looking at the renovation of oil tanks in Trincomalee while also increasing the capacity of the existing oil refinery as well as approving the setting up of a new oil refinery to meet the increasing energy demand. Apart from these developments, there are also emerging business/investment opportunities in Sri Lanka’s maritime industry including in oil bunkering. With Sri Lanka on a steady growth path with an expanding energy industry and related sectors, foreign businesses/investors could explore the expanding business/investment opportunities in the industry and related sectors, especially given the growth and profits recorded by foreign businesses already engaged in the local energy industry.
| Article Code : | VBS/AT/20250909/Z_2 |