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Hambantota aims to offer competitive regional bunker prices

Sri Lanka’s Hambantota port is aiming to offer bunker prices at the “lowest possible rate” in the region when it commences bunkering operations by the middle of June, reports said.

The much-delayed bunkering terminal, built at a cost of $95m, will start with an initial capacity of 55,000 metric tonnes.

“We will start before 15 June. Everything is tested and we are getting the first parcel most probably in the first week of June,” Priyath Wickrama, chairman of Sri Lanka Ports Authority (SLPA), told Reuters.

“We are starting from zero. So the first year is going to be a promotional year. We will give (bunkering services) at the lowest possible rate in the Indian subcontinent,” Wickrama was quoted as saying.

Currently, Sri Lanka’s main bunkering port Colombo is selling the 380 cst bunker fuel grade at around $632 per metric tonne, higher compared to India’s Mumbai 380 cst at $622 per metric tonne, according to data from Ship & Bunker.

Colombo port, which has fuel storage capacity of around 33,000 metric tonnes a month, is facing huge constraints of storage space, according to local bunker suppliers.

“Every ship has to wait 2-3 hours outside Colombo port. Instead of waiting, they can get bunkers from Hambantota. We will monitor the Indian subcontinent bunker price and always we will maintain a price below that,” Wickrama was reported saying.

He added that the initial 55,000 metric tonnes of capacity from Hambantota’s eight tankers is expected to add a further 100,000 metric tonnes in a second phase, before further expanding to 650,000 metric tonnes depending on demand.

SLPA is targeting 300,000-400,000 metric tonnes of bunker sales in the first year, and possibly 1m metric tonnes within five years.

The bunkering terminal is part of a $1.5bn Hambantota port development plan to capture transhipment activities and container shipping along the East-West route.

Wickrama said the port’s business activities will pick up with bunkering and eight new berths in the second phase, which is expected to be completed by 2015.

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