Deliberations to build a cross country products pipeline from Columbo Port to Kolonnawa Terminal in Sri Lanka have been taken up anew by the government after huge demurrage charges for delays in unloading fuel assignments became known.
The Sri Lankan Auditor General recently revealed that the state-owned Ceylon Petroleum Corporation (CPC) paid about Rs. 488 million ($2.7 mil) over the last five-year period to shipping companies as late fees. This was attributed to the delay in unloading fuel consignments at Sri Lankan ports due to the existence of only one active pipeline to transport fuel and insufficient fuel storage facilities.
The Ministry of Petroleum Resources Development in its 2017 annual report stated that it co-ordinated all the activities of the project with the CPC and Ceylon Petroleum Storage Terminals Ltd. (CPSTL).
“Almost all the preliminary steps of this project such as the preliminary topographical surveys, geographical surveys, initial environmental examination, identification of most suitable (feasible) pipe-laying route, and provision for compensation and remedies to the affected parties have been completed. Now it is in the process of finding funds and selecting a suitable contractor to implement the said project in time,” the 2017 report added.
No major developments were reported in the project up until 15 November last year, on which date China Petroleum Pipeline Engineering Co. Ltd. (CPPECL) on its website noted: “On 30 October, CPP received a letter of award from the owners of the Kolonnawa cross-country pipeline project in Sri Lanka.”
Mnistry of Energy Secretary Olga noted that a feasibility study following the award has yet to be done:
“We are going to do a feasibility study and handover the project to the same company that was selected. They have quoted a cost of $ 50 million. The selected party does not come with a funding agency. We have to find a source of funds through the Department of External Resources (ERD),” she added.
The existing three pipelines from the Dolphin Pier at the Colombo Port to the Kolonnawa Terminal were built in the 1940s for the transportation of petroleum products. Out of these pipelines, two were abandoned many years ago due to the inability to carry out maintenance and repairs as a result of illegal encroachment on the pipeline terrace by squatters.