Monday, February 20, 2012

LIOC invests US 12mn on Trincomalee oil tank farm

*Upgrades facilities in Lower Tank Farm, oil jetty and bowser filling bay

 *Sets up lubricant blending plant

 *Expects bunkering opportunity at Hambantota port

By Ravi Ladduwahetty

Lanka Indian Oil Corporation Ltd has invested US$ 12 million in the Trincomalee oil tank farm and studies are being done to improve the infrastructure further.

"We have spent nearly USD 12 million in refurbishing and upgrading the facilities in the Lower Tank Farm, setting up a lubricant blending plant, upgrading the oil jetty, laying new pipelines and bowser filling bay and many such facilities at Trincomalee. The upliftment has improved substantially in the recent past," Lanka IOC Managing Director / CEO K.R. Sureshkumar told The Island Financial Review yesterday.

He was responding to a question on the effectiveness of the LIOC plans in the context of the Expropriation Bill where the local arm of the Indian multinational giant was given 99 tanks under a 33 year lease and there were only 15 tanks in operation which did not seem as good as the operations of Pelwatte Sugar and Sevanagala Sugar which were taken over under the aegis of the bill.

"We are also making plans and have carried out studies for improving the infrastructure further. The studies indicate that the plan has to be made for the medium to long term. We plan to undertake refurbishing and upgrading a number of tanks in the first phase at substantial expenditure," Sureshkumar said.

"Various steps for making this possible are under way and we hope to complete the first phase within the next 2-3 years so that the utilization of the facilities will see a quantum jump," he Sureshkumar.

"At the same time, long term plans have also been worked out and also will be implemented in due course taking into account the demand in the country, the cope for export and creating more modern facilities for handling products at Trincomalee. Lanka IOC has invested at Trincomalee and will continue to invest more. It hall be our endeavor to make Trincomalee an Energy Hub. We shall be bringing all the expertise that we have in developing a modern and upgraded Tank Farm at Trincomalee so that it will serve the intended purpose for many years to come."

Asked what the company’s plans for Hambantota were, the LIOC Managing Director said that he understands that, at present, Sri Lanka Port Authority would be the only Agency to do bunker fuel business at Hambantota and that he hoped that Lanka IOC will also be permitted to do the business at Hambantota.

"We also hope that the volume of business carried out there reaches the optimum level at the earliest.

The business potential can be fully tapped only if active players in bunker fuel are provided the opportunities to carry out their operations. The objective must be to put Hambantota on the world map as a bunker destination," he said.

"Hambantota Port is strategically located to meet the bunker fuel requirements of vessels calling on Sri Lanka. The locational advantage has to be encashed by Sri Lanka by offering opportunities to the entire bunkering sector for carrying out business at Hambantota. Bunker players in Sri Lanka have developed a certain expertise in carrying out operations and it is necessary that this expertise is fully tapped by the Government of Sri Lanka for the benefit of the country."

Responding to a question as to how do you sees the continuity of LIOC in Sri Lanka, given that multinational Cairns has struck oil here, he said: "Lanka IOC is in the downstream petroleum sector.

We are importer and marketer of petroleum product in Sri Lanka. We have sustained our business during the last ten years despite of the market volatility and the uncertainties. We have made significant contribution to the oil security of Sri Lanka. We shall partner in the growth of this sector in Sri Lanka in the future. We have developed a long term plan for our various business segments which include substantial capital investment in the network expansion a well a creation of infrastructure. Lanka IOC is not in the upstream business of exploration and drilling."

Asked whether he thinks that the government will continue to depend on multinational suppliers such as LIOC if the oil exploration bid is successful, he said: "Lanka IOC is a company based in Sri Lanka.

 We use the expertise developed over the years for the benefit of Sri Lanka. The international operation of the parent company add significant value to the company here as we are able to source products far across the globe at competitive rate .We are not constrained by the need to source from a particular origin.

"This freedom to obtain products at competitive rates from across the globe also helps to bring the product of superior quality to Sri Lanka. We also provide substantial oil security to Sri Lanka in close cooperation and coordination with the Government. Therefore our role in developing the petroleum sector in Sri Lanka is significant and our partnership with the Government of Sri Lanka is growing from strength to strength," he said.

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1 comment:

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