Indian Prime Minister Narendra Modi urged President Anura Kumara Dissanayake during a phone conversation this week to accelerate energy sector projects agreed upon between the two countries, with particular focus on the joint venture to develop the Trincomalee oil tank farm.
The call came after President Dissanayake reached out to request rescue fuel supplies from India’s IOCL (Indian Oil-Lanka). The Sri Lankan government had sought India’s intervention to release 38,000 metric tonnes of fuel that had been held up by IOCL due to supply disruptions following the closure of the Strait of Hormuz.
Mr Modi emphasized to the Sri Lankan President that the project would be mutually beneficial, enhancing Sri Lanka’s energy security while increasing its storage capacity.
Under a 2023 joint venture agreement, Trinco Petroleum Terminal (Pvt) Limited, a partnership between Sri Lanka’s Ceylon Petroleum Corporation (CPC) and India’s Indian Oil Corporation, aims to develop a total of 61 tanks, with nine tanks in the first phase. However, work on the project has been stalled for several years despite the agreement being in force.
“The renovation of each tank will cost around USD 1.2 million, with the entire project estimated at USD 75–100 million,” said Foreign Affairs Minister Vijitha Herath. He added that the matter had been discussed during his talks with India’s External Affairs Minister S. Jaishankar.
Mr Herath told the Sunday Times that a special cabinet paper would be submitted shortly to expedite the project and invite tenders for the renovation of the oil tanks.
“This project will ensure that domestic fuel supply remains stable, while India can utilize the facility for bunkering or exporting products from here,” he noted.
In a joint India-Lanka statement issued following President Dissanayake’s visit to India in December 2024, both sides reaffirmed their cooperation in developing the Trincomalee Tank Farms. The leaders also expressed support for developing Trincomalee as a regional energy and industrial hub.
Meanwhile, a shipment of 38,000 MT of petroleum products – 20,000 MT of diesel and 18,000 MT of petrol – from India arrived in Colombo today.
“Lanka IOC had earlier secured fuel supplies for March from the Middle East and Singapore. However, suppliers were unable to deliver and invoked force majeure due to supply disruptions and vessel unavailability caused by the ongoing conflict in the Middle East,” the Indian High Commission said in a statement yesterday.
“Due to these disruptions, rescue supplies were requested from India via IOCL. The current shipment of 38,000 MT forms part of these supplies. The Government of India, through Lanka IOC, has extended support to Sri Lanka to maintain continuity of fuel supply,” the statement added.
