Lanka IOC (LIOC)is to extend its bunker business once new pipelines connecting the Colombo port with storage terminals are completed. The pipes are to be laid by common infrastructure firm Ceylon Petroleum Storage Terminals Ltd (CPSTL), which is jointly owned by LIOC, the state-owned Ceylon Petroleum Corporation, and the Sri Lankan government. LIOC, a unit of Indian Oil Corp, started bunkering ship fuel in the eastern port of Trincomalee last year, but believes there is more potential in Colombo, LIOC managing director K. Ramakrishnan said. But Colombo’s port infrastructure needs to be upgraded so that other players can enter the market and challenge the dominance of the entrenched player, Lanka Marine Services (LMS), the former state monopoly now owned by the John Keells group.
Bunker suppliers need to be able to receive fuel and send it to tank farms north of the port for storage and then to deliver it back to vessels, Mr Ramakrishnan said. For this, there is a need to lay pipelines as the only fully-equipped land storage terminal now is the one owned by LMS. “For others to enter the market, the infrastructure should be improved for efficient delivery. The existing pipeline network needs to be revamped and new lines laid,” Mr Ramakrishnan said. The investment and work to lay new pipelines connecting the port with two major oil storage facilities is to be done CPSTL: under the project new pipelines will be laid to connect the port and the Kolonnawa and Muthurajawela oil terminals north of the harbour, and 12 secondary depots. CPSTL has also proposed to lay a new submarine pipeline from Muthurajawela to a mooring bouy 5-6km offshore.