Sri Lanka, India recognize urgency, but no result on implementation yet

Colombo, June 19 (Daily Mirror) - In the wake of the West Asian or Middle East crisis, Sri Lanka and India have recognized the need for the expeditious implementation of the Trincomalee petroleum hub project for energy security, but no specific timeline is carved out yet, Daily Mirror learns.

Trincomalee has been identified as a nodal point of cooperation between India and Sri Lanka in the field of energy security. The 1987 Indo–Sri Lanka Accord marked the first formal reference to Indian involvement in the development of the Trincomalee oil tank farm.

Later, during the 2002–2004 period, India and Sri Lanka signed agreements allowing Indian Oil Corporation (IOC) involvement in fuel sales and distribution in Sri Lanka. However, this did not lead to the full development of the 99 tanks in the farm. Once again, in 2015, talks were launched for the revival of the project, with plans for expansion. When Indian Prime Minister Narendra Modi addressed the Sri Lankan Parliament during an official visit in 2015, he referred to plans for the development of Trincomalee as a petroleum hub.

In 2023, the project took shape when Sri Lanka and India signed a formal agreement to jointly redevelop the Trincomalee Oil Tank Complex. A joint venture company, Trinco Petroleum Terminal Ltd (TPTL), was created. In it, the Ceylon Petroleum Corporation holds 51 percent and Lanka IOC (a subsidiary of Indian Oil Corporation) holds 49 percent. The agreement covers 61 tanks out of 99 for joint development.

When Prime Minister Modi visited Sri Lanka last year, a tripartite agreement was signed among India, Sri Lanka and the United Arab Emirates (UAE) to develop a multipurpose pipeline connecting the two countries for two-way energy supplies.

When Indian Foreign Secretary Vikram Misri visited Sri Lanka recently, the need for the development of the project as agreed was discussed. He even told a press conference after bilateral meetings that although a timeline has not yet been established, discussions were in progress, given the complexity of the project and its significant financial outlays.

Asked about the latest update on the project, a top source said that fresh discussions had been undertaken for the development of Trincomalee for storage, bunkering and even refinery to stave off future energy shocks from events such as the Middle East crisis. The source with firsthand knowledge on discussions said a specific timeline could not be outlined for the start of project implementation at the moment. The source cited Nepal and Bangladesh as two countries benefiting from connectivity with India for energy supplies in the region at the moment.