Dr Sarath Obeysekera

Sri Lanka should initiate following project in Trinco in parallel with the proposed development of Oil Tanks in Trincomalee

A. Deep Water Oil Jetty (POP Model)
• Public–Private Partnership with Plug-in Operator Participation (POP)”
• Capable of handling VLCC / ULCC tankers
• Linked via subsea or onshore pipelines

Investor appeal:
• Long-term throughput guarantees
• Strategic location near East-West shipping lane

B. Slop & Residue Processing Hub

This is actually a high-margin niche often ignored.
• Reception of:
• Sludge
• Tank bottom residues
• Oily water mixtures
• Processing into:
• Recovered fuel oil
• Waste treatment products

Why it works:
• Environmental regulations (IMO) force ships to dispose safely
• Few facilities exist in the region
• Recurring revenue stream

C. Tanker Retrofit & FPSO Conversion Yard

This is the most ambitious—and potentially transformative.
• Convert aging tankers into:
• Floating Production Storage and Offloading vessel (FPSO)
• Provide:
• Hull repairs
• Life extension retrofits
• Offshore conversion engineering

Market drivers:
• Rising offshore energy projects
• Cost advantage vs building new FPSOs
• Demand in Africa, Southeast Asia, and India

3. Competitive Advantage for Sri Lanka

Sri Lanka can differentiate itself from competitors like Singapore or Dubai by offering:
• Lower operating costs
• Neutral geopolitical positioning
• Natural deep harbor (Trincomalee is one of the deepest in the region)
• Existing tank farm potential (underutilized assets)

4. Key Risks (Must be addressed upfront)

Let’s be blunt—this is where past efforts failed:
• Policy inconsistency
• Hidden bilateral constraints (especially energy agreements)
• Port Authority resistance / bureaucracy
• Lack of transparent tendering
Without fixing governance, investors will not commit capital.

5. What we Should Push For (Action Plan)

To make this real, our proposal should demand:

1. Cabinet-Level Strategic Classification

Declare Trincomalee as:

Energy Maritime Industrial Zone”

2. Ring-Fenced PPP Framework
• Independent regulatory body
• Transparent concession agreements
• No political interference

3. Indian Partnership – But Balanced

Engage India (given proximity and demand), but:
• Avoid exclusivity clauses
• Keep multi-country investor access (Japan, Korea, Middle East)

4. Anchor Investor First

Target:
• Global FPSO operators
• Oil majors
• Shipyard giants