By: Staff Writer
November 11, Colombo (LNW): Nearly three years after Sri Lanka and India agreed to jointly develop the historic Trincomalee oil tank farm, the project remains largely stagnant, highlighting the government’s lack of urgency in tapping one of the country’s most valuable strategic assets.
Under the quadripartite agreement signed on 6 January 2022 between the Government of Sri Lanka, the Ceylon Petroleum Corporation (CPC), Lanka Indian Oil Corporation (LIOC), and Trinco Petroleum Terminal (Pvt) Ltd (TPTL), the partners were granted 50 years to take custody, develop, and use the vast tank farm located in China Bay, Trincomalee.
The arrangement was intended to transform the 99-tank facility built by the British during World War II into a major regional petroleum storage and export hub. TPTL was authorised to engage in businesses such as petroleum storage, trading, and export of stored products, in a move expected to boost foreign exchange earnings and strengthen Sri Lanka’s energy security.
However, despite the grand vision and strategic location of the facility, actual progress has been dismal. Although a detailed development plan was drawn up soon after the agreement, it has not been implemented due to the lack of a reliable financing source. The government and its partners have also failed to finalise a formal agreement on the use of shared infrastructure such as jetties, pipelines, and other common facilities effectively paralysing even preliminary operations.
According to official sources, while TPTL was expected to rehabilitate at least a cluster of tanks and begin limited storage operations by 2024, work on the ground has barely begun. Only a few tanks have been earmarked for refurbishment, and bureaucratic indecision continues to stall progress. Despite repeated government assurances that the Trincomalee project is a national priority, the absence of funding, coordination, and leadership has left the project in limbo.
The potential of the tank farm remains immense. Trincomalee’s deep-water harbour is one of the finest in the region, ideally suited for oil storage and bunkering operations. A fully functional tank farm could make Sri Lanka a key petroleum logistics hub in the Indian Ocean, creating jobs, attracting foreign investment, and earning valuable foreign currency through exports.
Yet, the government’s passive approach and inability to convert policy into action risk turning this vital national asset into another missed opportunity. The Trincomalee oil tank farm could have been a cornerstone of Sri Lanka’s energy security and regional trade ambitions. Instead, it now stands as a symbol of bureaucratic inertia and short-sighted governance a project with vast potential, but little political will to see it through
