The 1930s Admiralty oil tank farm built in Trincomalee has long been the source of national pride, shame, trade union action, and much political posturing. The fact is that Sri Lanka didn’t move strategically to exploit the colonial-era energy infrastructure and let it fall into disuse over decades. The oil tank farm became an Indo-Lanka concern following the controversial Indo-Lanka Accord of 1987 and remains a football kicked from one government to the other, with little real investment and renovation by either Sri Lanka or India, despite repetitive bilateral ‘talks’ and ‘meeting’ on the matter over the years.  

The Indo-Lanka accord and the IOC’s involvement in the tank farm has effectively kept the project out of reach of other interested investors, which was perhaps an approach adopted by strategic designs.

Yesterday, during the Cabinet briefing, the new Government of the Janatha Vimukthi Peramuna (JVP)-led National People Power (NPP), stated that Cabinet approval has been provided for the restoration and development of 24 oil tanks at the Trincomalee Upper Tank Farm complex. According to the Government, the Ceylon Petroleum Corporation (CPC) will oversee a three-year project aimed at completing the development of these oil tanks. The project will include conducting a feasibility study and carrying out the necessary work. Approvals from the relevant parties, including the Road Development Authority, the Railways Department, and the Marine Environmental Protection Authority, have already been obtained for the project, Cabinet Spokesperson Minister Dr. Nalinda Jayatissa said, adding that, the proposal submitted by the Minister of Energy to implement the project with CPC funds has been approved. While this is the first ‘stated effort’ by the new Government, it remains to be seen how the project will be rolled out over the next three years. 

Multiple governments before have made similar decisions, only to fissile out due to poor planning, lack of investment, internal pressure via resistance from trade unions or environmentalists, and or external pressures. Let us hope that this time, the situation will be different. The JVP itself, with its staunch ‘anti-Indian expansionism’ stance, resisted multiple previous efforts on getting some traction of reviving the nearly century-old infrastructure which the British built and Sri Lankans let rot.

In early 2023, the Lanka Indian Oil Company (LIOC) told The Sunday Morning that there is adequate space available for the construction of new large-capacity oil tanks at the Trincomalee Oil Tank Farm. LIOC Managing Director Manoj Gupta, responding to a question on the then Government’s ambition to make Trincomalee a regional energy hub, said the company had identified space which could be used to set up new large-capacity tanks to further storage capacity at the facility, depending on the recommendations of a feasibility report which was being prepared. According to Gupta, the LIOC is pushing for early completion of the Upper Tank Farm (UTF) and is awaiting a feasibility study by PricewaterhouseCoopers India (PwCI) to proceed with phase two. He expressed confidence that phase one could be completed by December of 2023.

If the 24 tanks are renovated and brought back into operational status, with the necessary pipeline/pumping/control and fire-fighting infrastructure modernised, it would be a much welcomed boost to Sri Lanka’s energy security, as the tanks will offer a significant increase in storage of crude oil or petroleum products like diesel and petrol for the island nation. It remains unclear what products the Government plans to store in the renovated tanks. It is crude oil, that would be an indication that the NPP Government may be seriously considering another refinery, this time somewhere near Trincomalee Bay, which could benefit from the crude storage volume. Coincidently, the move may also be a signal that the proposed 600 km-long bi-directional multi-product petroleum pipeline between India and Sri Lanka may be gathering steam. That proposal, which was part of the MOU signed between former President Ranil Wickremesinghe and Indian Premier Modi on Indo-Lanka connectivity, was expected to supply Sri Lanka with its petrol, diesel, and kerosene needs from the new Indian Oil Corporation-owned refinery in Cauvery Basin, Nagapattinam, Tamil Nadu. The project had envisaged the pipeline to help make Trincomalee an ‘energy hub’.  

Let us hope that the Government moves with speed and transparency to fill the long-standing gaps in national energy security and ensure that Sri Lanka’s national interests are met diligently.