India has reportedly expressed interest in constructing a new oil refinery in Trincomalee, informed government sources said.

The proposed investment is likely to be discussed during President Ranil Wickremesinghe's upcoming tour to India, informed government sources said.

This is in addition to the existing oil storage facility in Trincomalee which was constructed during the British rule.

One of the major Indian investments is the acquisition of a 99-year lease of the strategic oil tank farm in Trincomalee by the Indian Oil Corporation (IOC) in 2003. The oil tank farm has a capacity of 99 tanks with a total capacity of 15.3 million barrels of oil.

In addition to the oil tank farm, the IOC has also invested in the development of the oil refinery in Sri Lanka. In 2005, the IOC signed a joint venture agreement with the Ceylon Petroleum Corporation (CPC) to upgrade the existing refinery in Sapugaskanda. The joint venture, Lanka IOC, has invested over $500 million in upgrading the refinery to increase its capacity to 100,000 barrels per day.

Furthermore, in 2017, the Indian Oil Corporation also expressed interest in setting up a liquefied natural gas (LNG) terminal in Sri Lanka. The proposed terminal would have a capacity of 1 million metric tonnes per annum and would be set up in collaboration with the Sri Lankan government.

Overall, Indian investments in the petroleum sector in Sri Lanka are aimed at enhancing energy security in the region and strengthening bilateral ties between the two countries.