India and Sri Lanka will jointly operate 30 oil tanks in Trincomalee, kick-starting a plan to develop the coastal town into a regional petroleum hub, Sri Lanka’s Petroleum Minister Chandima Weerakkody said.

He was referring to a proposal that Prime Minister Narendra Modi announced during his March 2015 visit to the island-nation, according to which Ceylon Petroleum Corporation and Lanka IOC would operate the farms together.

Starting point

Over a year after the announcement, Sri Lanka's Cabinet approved the proposal in July, after some revisions. Mr. Weerakkody said he would soon meet his Indian counterpart in New Delhi to firm up the terms of the joint venture. “It’s the starting point for developing the regional hub,” he told Colombo-based foreign correspondents.

Lanka IOC, a subsidiary of Indian Oil Corporation, currently operates 15 out of the 99 storage tanks in Trincomalee, located on Sri Lanka’s east coast. LIOC runs nearly 200 petrol stations in the country, in addition to operating bunkering services at its ports.

Given the strategic importance of Trincomalee, which has a large natural harbour, India is keen on expanding its operations at the oil farm in the coastal city. The joint venture would matter to New Delhi all the more now, after Colombo recently scrapped a coal power project in Trincomalee involving the National Thermal Power Corporation (NTPC).

Mr. Weerakkody invited Indian companies, among others, to invest in a refinery in Hambantota, in Sri Lanka’s Southern Province. The city houses a $361 million Chinese-funded harbour and is a crucial point in China’s Silk Road project.

“Many Chinese investors have shown interest. U.S. companies and even Indian companies have expressed interest. It requires an investment of $4 billion, but no one has come forward yet,” he said. Mr. Weerakkody said he would also hold discussions with Reliance Industries during his upcoming visit to India on possible investments.

(The Hindu)