What is the news?
India and Sri Lanka are going to sign the long pending deal to jointly develop the Trincomalee oil tank farms.
Trincomalee Oil Tank Farms:
The Trincomalee Oil Tank Farms is located in ‘China Bay’ in proximity to the internationally coveted deep water natural harbour of Trincomalee.
The Oil Tank was built by the British during World War II as a refuelling station.
The Oil Tank comprises 99 storage tanks with a capacity of 12,000 kilolitres each, spread across Lower Tank farm and Upper Tank Farm.
The proposal of joint development of this tank was envisaged 35 years ago, in the Indo-Lanka Accord 1987.
However, things barely moved until 2003 when the Indian Oil Corporation set up its Sri Lankan subsidiary, called Lanka IOC, to work on this oil farm.
Currently, Lanka IOC runs 15 tanks. The new agreement is being negotiated for the remaining tanks.
What will be the significance of this deal?
Strengthens Partnership: The deal will strengthen India and Sri Lanka energy partnership to enhance Sri Lanka’s energy security.
Strategic Location: Trincomalee remains in the spotlight as a potential transit point for international trade routes.
Counterbalance to China: From India’s viewpoint, Trincomalee is an important counterbalance to the Hambantota Port backed substantially by China.
Source: This post is based on the article ‘Sri Lanka to sign Trincomalee oil tank farm deal with India in a month, says Minister’ published in The Hindu on 28th Dec 2021.