Page 6 - AsianOil Week 02 2022

AsianOil SOUTH ASIA AsianOil

India, Sri Lanka agree to oil

tank restoration project

PROJECTS & IN a bid to increase its influence in neighbour- Operations at the site will be managed by
COMPANIES ing Sri Lanka, India has signed a joint venture Trinco Petroleum.
agreement with the government of Nandasena Under the deal CPC will be solely responsible
Gotabaya Rajapaksa to refurbish scores of oil for the operation of 24 further oil tanks at the
storage tanks in the north-east of the island. site.
The tanks were built and used initially by UK A 50-year lease on the 14 tanks IOC currently
forces in the early 1940s as part of the World operates was included as part of the agreement.
War II effort before they were put out of action The remaining two tanks, having been aban-
by Japanese aerial attacks. Overhaul of the tanks, doned and unused since the attacks by the Jap-
located just outside the north-eastern city of anese military in 1942, have decades-old bomb
Trincomalee, is seen as a crucial step in enabling damage deemed too severe to be able to repaired
both Sri Lankan energy security. Additionally, and will not be restored.
it is anticipated to bolster wider subcontinent Local sources, however, claimed the tanks
self-reliance at a time China’s regional influence referred to in the deal, and not currently in use,
is spreading across ever increasing areas of land, are themselves in various states of disrepair.
infrastructure and access to regional energy This is in large part the result of the tanks
resources. having been UK property until 1964, when they The tanks that
Sri Lanka’s Minister of Energy, Udaya Gam- were purchased by the government of Sri Lanka,
manpila, wrote on Twitter on January 6 that though the country had gained its independence can be saved
agreements to develop the Trinco Oil Tank from the UK 16 years earlier.
Farm had been signed by parties including the In total, the tanks that can be saved are are believed to
national government and the Lanka IOC, the believed to have a combined capacity of around
local unit of Indian Oil Corp. (IOC). 8mn barrels when fully operational. have a combined
India’s High Commission in Sri Lanka Just two days after the agreement was signed, capacity of
described the deal as a “new milestone”. China’s Foreign Minister Wang Yi arrived in the
It is understood the agreement would allocate Sri Lankan capital. Officially, the visit marked 65 around 8mn
51% of the project to Sri Lanka, with the remain- years since the establishment of official relations
ing 49% to India. No figures were released on between Colombo and Beijing. It is also thought, barrels.
financial amounts or terms either side would be though, that it was aimed at allowing China and
investing in the refurbishment project. Sri Lanka to discuss the latter’s energy-linked
The site originally contained 101 oil storage spiralling debt commitments.
tanks, but only 14 are currently in operation, Sri Lanka remains burdened by significant
having been used for the past few years as a result loans from Beijing secured against domestic
of a prior agreement between the local govern- infrastructure, including seaports, airports and
ment and the IOC. highways. Nominally this is showcased by China
The latest agreement will see the IOC and as part of its Belt & Road Initiative (BRI). How-
state-owned Sri Lankan entity Ceylon Petro- ever, growing Chinese influence in the Indian
leum Corp. (CPC), share ownership of 61 of the Ocean is proving increasingly worrisome for
remaining salvageable tanks. New Delhi.™

P6 www. NEWSBASE .com Week 02 14•January•2022