During his visit to Sri Lanka, Indian External Affairs Minister S. Jaishankar has made a special request to the Government of Sri Lanka not to hand over the oil tank complex in Trincomalee to another country.
The Indian government is suspicious that China will act to slow down or halt Indian-led projects in Sri Lanka, including postponing its long-standing request for upgradation and operation of oil tanks in Trincomalee.
The tank farm was built by British colonialists in 1930 on an area of 850 acres. Of the 101 tanks 99 can still be used.
The lower complex has been jointly managed by Ceylon Petroleum Corporation (CPC) and Indian Petroleum Corporation (IOC) -Lanka IOC (Pvt) Ltd or LIOC since 2003.
LIOC has upgraded these tanks, pipelines and jetty. It has also created new facilities such as additional storage tanks and lubricant mixing facilities while paying an Annual rent for its use.
However, a tripartite agreement signed between the Government of Sri Lanka, LIOC and the Petroleum Corporation in 2003 covers the entire tank complex. A status that India is keen to maintain.
The proposed Liquefied Natural Gas (LNG) terminal near Colombo, a joint venture between Petronet LNG Ltd., India’s largest gas importer, and its Japanese partners (Mitsubishi & Sojits), has also come to a standstill. Since 2018 no final approval has been received for the deal.
In October 2018, Indian Prime Minister Narendra Modi expressed concern over delays in joint venture projects during a meeting with then-Prime Minister Ranil Wickremesinghe in New Delhi.