Home / Business/ Lanka oil hub talks gather momentum

Lanka oil hub talks gather momentum


Comments / {{hitsCtrl.values.hits}} Views / Wednesday, 30 September 2015 00:32


Telegraph: India plans to set up its first overseas petroleum hub, along with a refinery and power plant, in Sri Lanka. The move is expected to spur Indian investment in the island nation.

A delegation of oil and power ministry officials along with representatives of Indian Oil Corporation and NTPC will soon visit Sri Lanka to push through the much-delayed project.

The two nations want the project to start before the signing of the Indo-Lanka Economic and Technological Agreement, expected in May-June 2016.

During Lankan Prime Minister Ranil Shriyan Wickremesinghe’s visit to New Delhi earlier this month, both sides discussed the setting up of Trincomalee oil tank facility in a joint venture along with an oil refinery by Indian companies and a thermal power plant.

State-run Indian Oil Corporation is keen on a refinery having a capacity of 6 million tonnes per annum (mtpa) in Lanka, its first such overseas project.

At present, Sri Lanka has a single refinery of 2.5mtpa capacity with demand for petroleum products double the capacity. In 2014-15, Lanka IOC’s turnover increased 9% to Rs. 8,180 crore, and profit after tax rose 65% to Rs. 480 crore.

Lanka IOC is the only oil company other than state-owned Ceylon Petroleum Corporation that operates retail petrol and diesel stations.

At present, it has 179 fuel stations in the country.

India is keen on developing Trincomalee as a regional petroleum hub as it is located on a shipping route between oil exporting Gulf nations and energy-starved Asian consumers. It will also provide a ready source of crude to New Delhi at a much competitive price with lower freight charges.

Lanka IOC, a subsidiary of Indian Oil Corporation, operates 15 storage tanks out of 99 in Trincomalee. The Sri Lankan government wants to develop the rest to increase the country’s storage capacity. Each of the storage tanks has a capacity of around 12,000 tonnes.

The 500 megawatt (MW) thermal power plant at Sampur in Trincomalee, which has been delayed for years, is set to pick up pace as the leaders of the two nations have shown keen interest in the project.

NTPC and Ceylon Electricity Board had signed an agreement in 2011 to set up a coal-based power project.


Share This Article


DISCLAIMER:

1. All comments will be moderated by the Daily FT Web Editor.

2. Comments that are abusive, obscene, incendiary, defamatory or irrelevant will not be published.

3. We may remove hyperlinks within comments.

4. Kindly use a genuine email ID and provide your name.

5. Spamming the comments section under different user names may result in being blacklisted.

COMMENTS

Today's Columnists

Unless addressed, wages issue will keep troubling Bangladesh’s garment industry

Saturday, 19 January 2019

The recent week-long mass protests by garment workers in Bangladesh came to an end after an upward revision of wages for six classes of workers. But even after the upward revision, the Bangladeshi garment worker gets less than what workers in compara


Is GDP the ideal metric of the future?

Friday, 18 January 2019

In an age of stark contradictions, we live in a world where the exclusive 1% enjoy access to an abundance of wealth and resources but also a world where a billion people scarcely have enough to eat and have limited access to health and education. Whi


Evaluation of economic performance: 4 years into Yahapalana Government

Friday, 18 January 2019

The Yahapalana Government completed four years on 8 January this year. The four-year journey was a rough ride with a clear rift between the President and the UNP; the ruling party. The Government continues to face severe criticism from both inside an


Elimination of bribery and corruption

Friday, 18 January 2019

Bribery and corruption can be regarded as a malicious cancer that has penetrated into almost every strata of Sri Lankan state. It can be considered a major factor affecting Sri Lanka’s poverty, backwardness and indebtedness. Abuse of power by thos


Columnists More