5 January 2022 09:22 am
The government plans to sign an agreement with India to jointly operate the Trincomalee Oil Tank Complex with Lanka IOC PLC next week following Cabinet approval this week.
The Cabinet of Ministers on Monday approved a Cabinet memo by Energy Minister Udaya Gammanpila to allocate 24 oil tanks to Ceylon Petroleum Corporation (CPC), 14 tanks of the lower oil tank complex already used by Lanka IOC for its business activities and to jointly develop the remaining 61 tanks under a project company called Trinco Petroleum Terminal Pvt. Ltd.
Trinco Petroleum Terminal Pvt. Ltd was established as a fully owned subsidiary of CPC. However, under the agreement with India, 49 percent of the company would be handed over to Lanka IOC while CPC retaining controlling stake in the company.
Minister Gammanpila told the weekly Cabinet press briefing held yesterday that the government plans to enter into the relevant agreements next week in order to re-commence operations and to jointly develop Trincomalee oil tank complex.
Further, he insisted that the government would regain control of 85 oil tanks from India under the new agreement.
With CPC retaining 51 percent control stake in JV, Trinco Petroleum Terminal Pvt. Ltd, he emphasised that the Chairman of the company as well as four out of its seven board members would be appointed by the CPC.
Moreover, Gammanpila remarked that the financial accounts of the company would be audited by the Auditor General and the company would come under parliament’s inspection.
The oil tank farm, which has been built by the British in 1944, contains 101 oil tanks. However, as of now only 99 tanks are in a usable state. According to the Indo – Sri Lanka Pact signed in 1987, the revival of the oil tank farm and recommencing operations must be implemented by both Sri Lanka and India through a joint venture.
Gammanpila noted that the oil tank complex has a capacity of 8 million barrels.