Sri Lanka has agreed to lease 75 oil tanks from Lanka IOC, a local unit of Indian Oil Corp. According to an AFP article, Energy Minister Udaya Gammanpila stated that the agreement inked with the Sri Lanka Unit of Indian Oil Corporation would involve the rehabilitation of tanks used by allied forces during World War II near the eastern port of Trincomalee.
According to reports, the agreement is considered as a challenge to China’s growing influence in the region, and it comes just two days before Chinese Foreign Minister Wang Yi visits the Indian Ocean island nation.
Meanwhile, Gammanpila wrote on Twitter, “Agreements to develop Trinco Oil Tank Farm inked this evening.”
Sri Lanka and India’s agreement
According to the agreement, Sri Lanka will own 51% of the shares and India will own the rest. However, the minister did not say how much money each side would put in. The Indian company will have a 50-year lease on the 14 tanks it presently operates, as well as joint ownership of 61 tanks with country’s state-owned Ceylon Petroleum Corporation, under the new agreement (CPC).
Sri Lanka’s government had approved plans to create the tanks, which have a capacity of eight million barrels, earlier this week.