Despite Indian Prime Minister Narendra Modi’s public comments about an agreement to build a multi-product pipeline aimed at developing Trincomalee as an energy hub, Sri Lankan authorities remain uncertain about the development, The Sunday Morning learns.
According to reliable sources, the Sri Lankan Government has only held one discussion on the pipeline since the new administration came into power, which was limited to a meeting by the Energy Committee, which comprises key figures from Sri Lanka’s energy sector.
Prime Minister Modi, during a press conference with President Anura Kumara Dissanayake, spoke about the agreement, highlighting that the project would benefit the people of Sri Lanka. He also stressed the grid interconnectivity agreement between the two countries, which he said would open avenues for Sri Lanka to export electricity.
Modi noted: “The Sampur solar power plant will help Sri Lanka achieve energy security. The agreement reached to build a multi-product pipeline and develop Trincomalee as an energy hub will benefit all Sri Lankans. The grid interconnectivity agreement will create opportunities for Sri Lanka to export electricity.”
Additionally, he welcomed the inauguration of 5,000 solar rooftop systems for religious places in Sri Lanka and India’s support for the Sri Lanka Unique Digital Identity (SLUDI) project.
No financial feasibility studies yet
Despite the signing of Memoranda of Understanding (MOUs) between India, Sri Lanka, and the UAE for cooperation in the development of Trincomalee, it has been revealed that no financial feasibility studies have been conducted for the multi-product pipeline. This raises concerns over the project’s viability and future trajectory.
As previously reported by The Sunday Morning, the proposed pipeline from India to Sri Lanka includes a minimum purchase clause, a provision that was under review by Sri Lankan authorities during the previous Government’s tenure.
According to the proposal, Sri Lanka would face financial liability if it fails to meet the agreed-upon volume of petroleum imports from India. The pipeline, planned to connect Nagapattinam in India with the Trincomalee Oil Tank Farm and Colombo, is part of a larger effort to create a cross-border energy corridor.
Discussions about the pipeline began several years ago, gaining momentum after meetings between former Minister of Power and Energy Kanchana Wijesekera and officials from the Indian Oil Corporation (IOC) during the India Energy Week in Goa last year. The talks primarily focused on the technical feasibility and strategic value of the proposed project.
The foundation for this collaboration was built upon the existing partnership between Ceylon Petroleum Storage Terminals Ltd. (CPSTL) and Lanka IOC (LIOC) in Trincomalee, which has led to expanded energy cooperation between the two countries and could lay the groundwork for future investments.
India had initially submitted a proposal that envisioned a multi-product oil pipeline connecting India and Sri Lanka, with suggested routes leading to Muthurajawela and Trincomalee. Former Secretary to the Power and Energy Ministry Dr. Sulakshana Jayawardena noted that the pipeline was meant to facilitate both the import and export of petroleum products.
India backs Trinco deal
Indian Foreign Secretary Vikram Misri, addressing a media briefing in Colombo, confirmed that the proposed development of Trincomalee was part of a trilateral initiative involving India, Sri Lanka, and the UAE.
Speaking on the MOU signed between the three countries, Misri said the agreement currently functioned as a government-to-government development framework, aimed at creating an enabling environment and setting out general principles for cooperation.
“The immediate next step under this MOU is to identify and nominate specific implementing agencies – whether they are government bodies, private sector firms, or affiliated institutions – that will carry out the business-to-business components of the agreement,” he said.
“The actual projects will then be developed and discussed in detail by these designated entities from all three nations.”
Misri highlighted the UAE’s strong strategic relationship with India, especially in the energy sector, noting that its involvement in the Trincomalee initiative made it a natural fit. “This is the first time such a trilateral initiative is being undertaken in the region,” he said, adding that the specifics of the UAE’s role would become clearer as business-level discussions progressed.
Responding to a question on the scope of proposed projects, Misri confirmed that the development of a product pipeline was among the topics to be explored under the MOU.
“This has already been under discussion between India and Sri Lanka and is one of the projects that could potentially receive direct financial support,” he noted. “There are several other projects under consideration as well.”
CPC seeks clarity
In such a backdrop, when contacted by The Sunday Morning, Ceylon Petroleum Corporation (CPC) Managing Director Dr. Mayura Neththikumarage noted the decision-making process at the CPC was very clear and straightforward.
“When there is a request or a proposal, we evaluate it based on standard criteria,” he said.
“There is a proposal, although it is not from the petroleum sector specifically. This particular proposal pertains to a multi-product pipeline. The proponents claim they can offer the product at a more competitive price. Whether it is transported via a pipeline or shipped is a logistical consideration, essentially a matter of a delivery mechanism.
“From the CPC’s standpoint, if any party submits a proposal offering a better price through a transparent tender process, there is no reason to reject it based on the country of origin – be it India, China, Russia, or any other nation – provided there are no sanctions, political restrictions, or legal issues involved. The CPC evaluates only the legality, official nature, and transparency of the process,” he explained.
Dr. Neththikumarage further noted that such proposals typically came through either a Government-to-Government (G2G) agreement or a public tender, noting that it was the standard protocol followed by the CPC. Decisions regarding whether to build or use a pipeline fall under the purview of the Government and are purely political in nature.
“Technically, the project is entirely feasible. There are no barriers to constructing a cross-country pipeline or even an undersea one. Many such projects exist worldwide. However, the financial feasibility of this proposal is yet to be assessed. That much I can confirm with certainty,” he said, adding that to date, no financial analysis had been conducted to determine the economic viability of the project.
“For the CPC to move forward, that aspect must be evaluated. The Government needs to appoint a committee to study the financial feasibility in detail. I was part of the discussions on this matter. Our position was very clear: from the CPC’s perspective, if the Government deems the project necessary and the financial feasibility is confirmed, we are open to moving forward.
“However, until we have a clear understanding of the financials, the CPC cannot commit to investment, expenditure, or obligations. We made this clear during the discussion as well; we need to see the numbers. However, those financial details were not available and further analysis is required before any decisions can be made,” Dr. Neththikumarage added.