Trincomalee oil hub talks gather momentum
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 country.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 ofthe Indo-Lanka Economic and Technological Agreement, expected in May-June 2016.
During Prime Minister Ranil Wickremesinghe's visit to New Delhi earlier this month, both sides discussed the setting upof 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 acapacity of 6 million tonnes per annum (mtpa) in Lanka, its firstsuch overseas project.
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 per cent to Rs 8,180crore, and profit after tax rose 65 per cent to Rs 480 crore.
Lanka IOC operates 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 Gulfnations and energy-starved Asian consumers.
It will also provide aready source of crude to New Delhi at a much competitive price withlower freight charges.Lanka IOC, a subsidiary of Indian Oil Corporation, operates 15storage tanks out of 99 in Trincomalee. The Sri Lankan governmentwants 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 inTrincomalee, which has been delayed for years, is set to pick up paceas the leaders of the two nations have shown keen interest in theproject.NTPC and Ceylon Electricity Board had signed an agreement in 2011to set up a coal-based power project. (The Telegraph)
- See more at: http://www.dailynews.lk/?q=business/trincomalee-oil-hub-talks-gather-momentum#sthash.AVs0xxtc.dpuf