The move was approved by the Cabinet of Ministers at their meeting on Monday to honour the next phase of the Trincomalee oil tank development project with the Ceylon Petroleum Corporation (CPC) set to proceed without financial support from the General Treasury.

The decision follows an agreement signed on 6 January 2022, just months before declaring a sovereign debt default —between the Government, CPC, Lanka Indian Oil Company (LIOC) and Trincomalee Petroleum Terminal Ltd., outlining the ownership, development and utilisation of the China Bay oil tank farm.

Under this agreement, 24 tanks in the Upper Tank Yard were leased to CPC for 50 years. The Corporation has since formulated a three-year development plan, conducting feasibility studies and securing approvals from key regulatory bodies, including the Road Development Authority (RDA), Sri Lanka Railways and the Marine Environment Protection Authority (MEPA).

Cabinet Spokesman and Minister Dr. Nalinda Jayatissa clarified that the latest approval pertains only to proceeding with the development plans initially sanctioned in 2022.

“The latest approval is limited to carrying out the development plans initiated in 2022. Thus, there are no specific investment figures involved in the Cabinet proposal,” he said in response to the questions raised by the journalists post-Cabinet meeting media briefing.

In January 2025, Energy Minister Kumara Jayakody announced that the said project would move ahead as planned. Originally, the first phase of the project was estimated $ 15-20 million and was targeted for completion in 2023.