India-Sri Lanka formally sign deal to develop Trinco oil tank farms

Sources in the Ministry of External Affairs on Friday said that relevant documents were signed in Sri Lanka on 6 January 2022 to jointly develop the Trincomalee Tank Farms (TTF).

New Delhi: Sources in the Ministry of External Affairs on Friday said that relevant documents were signed in Sri Lanka on 6 January 2022 to jointly develop the Trincomalee Tank Farms (TTF).

The signatories include the Government of Sri Lanka, Lanka IOC (LIOC), Ceylon Petroleum Corporation (CPC) and the Joint Venture between LIOC and CPC. As per this understanding, 16 tanks of the Lower Tank Farm (which have already been developed by LIOC) will be leased to LIOC; 61 tanks in the Upper Tank Farm to a Joint Venture between Lanka IOC and CPC; and 24 tanks in the Upper Tank Farm to the CPC. Suitable provisions exist in the agreements to protect the investment.

This is an important step towards the modernization of TTF, which also featured among the 4 pillars of economic cooperation discussed during the visit of the Finance Minister of Sri Lanka Basil Rajapaksa to India in December 2021, it added. The signing of the documents comes days after the Sri Lankan cabinet cleared the long-pending Trinco tank farm deal with New Delhi.

Sources today said that the cooperation in energy security is an important area of bilateral cooperation between India and Sri Lanka under India’s ‘Neighbourhood First’ policy and ‘SAGAR’ doctrine.

It is pertinent to note that, while the understanding to jointly develop Trincomalee oil storage facility is rooted in the 1987 Indo-Sri Lanka Accord, the storage facility at TTF could be developed only in a very limited way so far due to the absence of a lease which was to be signed within six months of Agreement among GOSL, LIOC and CPC in 2003.

Sourced in the Ministry reiterated that today’s development is another significant step in broadening the spectrum of India-Sri Lanka mutually beneficial economic partnerships. It will also assist Sri Lanka in the development of Trincomalee as an energy and transport hub to further bolster its energy security.

"This understanding is another good example of our desire to foster win-win cooperation between the two countries, and their public and private sectors", sources added. On Thursday, addressing the press briefing, MEA spokesperson Arindam Bagchi said, "Trincomalee oil tank farm deal will boost bilateral energy cooperation"

“We have seen reports that the Sri Lankan Cabinet has approved the development of the Trincomalee tank farms. Energy security is an important area of our bilateral cooperation with Sri Lanka,” he added.

“We are in consultation with the Government of Sri Lanka for the modernisation of the Trincomalee tank farms. This will allow for the storage of fuel and will augment bilateral energy security,” Bagchi said on Thursday.

India looks forward to the full implementation of bilateral understandings reached within agreed timelines.