Sri Lanka’s state owned Ceylon Petroleum Corporation to jointly develop oil tank farm in Trincomalee
Sri Lanka’s Minister of Petroleum Resources Development Arjuna Ranatunga has reportedly said that the country’s state-owned Ceylon Petroleum Corporation (CPC) will jointly develop the unused oil tank farm in the eastern port of Trincomalee with Indian Oil Corporation’s local unit, the Lanka Indian Oil Corporation (LIOC).
LIOC, which is listed on the Colombo bourse, has leased part of the tank farm with up to 99 tanks under an agreement between the two governments in 2003, Ranatunga has told a news conference.
But apart from 15 tanks used by LIOC, the other tanks remained unused for the last 15 years, reports state.
Ranatunga has said that he would like to have a joint venture between LIOC and CPC to repair and make use of the tank farm.
According to the Minister, the Cabinet of ministers has approved his proposal for the joint venture.
Ranatunga has said he proposed Sri Lanka retain ownership of the land but hand over to LIOC 15 tanks now used by the firm and sign a deal to joint develop the remaining 85 tanks.
“The CPC aims to use the tanks to provide bunkering for ships and to store and distribute refined petroleum products in the north-east which is now supplied from Colombo which is more costly,” Ranatunga has added.
OSL take:
The move by the Sri Lankan government to develop the oil tank farm in the country’s eastern port of Trincomalee as a joint venture between Sri Lanka’s CPC and India’s Oil Company would broaden business opportunities in the petroleum sector. While the developed oil tanks will be used for bunkering for ships that call at Trincomalee, interested foreign companies could look at approaching the Sri Lankan government to explore the possibility of taking on lease several tanks. Foreign businesses could also explore opportunities in oil bunkering at the Hambantota Port as well.
| Article Code : | VBS/AT/20181019/Z_1 |