Ajith Perakum Jayasinghe
What is an energy hub?
An energy hub is a strategically located site for storing, refining, and distributing energy resources such as petroleum, natural gas, and electricity. According to the International Energy Agency (IEA), energy hubs are “key nodes that enable flexible energy flows, ensuring balance and stability across interconnected systems.”
Globally, major energy hubs include Singapore (Asia’s top oil trading hub), Rotterdam in the Netherlands (Europe’s largest fuel port), and the Fujairah Port in the UAE.
What is the importance of an energy hub?
Energy hubs help reduce dependency on imports, lower fuel transport costs, and boost energy security. They also attract foreign investment, generate employment, and promote regional cooperation. The World Bank emphasizes that “regional energy hubs can transform energy access and affordability, particularly for developing economies with vulnerable supply chains.”
What is the Trincomalee-based energy hub?
Trincomalee, on Sri Lanka’s eastern coast, is being developed into a regional energy hub under a trilateral MoU signed by the UAE, India, and Sri Lanka. The plan includes:
- Upgrading the Trincomalee oil tank farm
- Establishing bunkering and fuel supply infrastructure
- Developing a new petroleum refinery
- Constructing a bi-directional petroleum pipeline connecting India and Sri Lanka
The project will be managed by a joint venture between Abu Dhabi Ports (UAE), Indian Oil Corporation (India), and Ceylon Petroleum Corporation (Sri Lanka).
Who will benefit from it?
Sri Lanka will enhance its energy independence and gain long-term economic and strategic benefits. India and the UAE will strengthen energy trade routes and deepen geopolitical ties. The wider South Asian region will benefit from improved fuel connectivity, regional stability, and lower energy costs.
Ranil Wickremesinghe, Former President of Sri Lanka, in a discussion with NewsX Live ahead of Indian PM Narendra Modi’s visit said that plans were afoot to develop Trincomalee as a logistics hub too. He said that India investing in Sri Lanka would encourage others to invest without waiting for 2027, 2028 see how the Sri Lankan economy would perform.
China’s work in Hambantota
China has also developed a significant energy-related port in Hambantota, located in southern Sri Lanka. The China Merchants Port now controls a 99-year lease of the Hambantota Port, which includes oil storage facilities and logistics infrastructure. While not yet a full energy hub, Hambantota has strategic potential and reflects China’s growing influence in regional maritime and energy trade. Sinopec has signed a deal to build a $3.2-billion oil refinery in Sri Lanka’s southern port city of Hambantota.
With developments in both Trincomalee and Hambantota, Sri Lanka is emerging as a key player in South Asia’s evolving energy landscape.
