India plans to set up its first overseas petroleum hub, along with a refinery and power plant, in Sri Lanka, Indian media reports.

The move is expected to spur Indian investment in the island nation.

A delegation of oil and power ministry officials along with representatives of Indian Oil Corporation and NTPC will soon visit Sri Lanka to push through the much-delayed project.

The two nations want the project to start before the signing of the Indo-Lanka Economic and Technological Agreement, expected in May-June 2016.

State-run Indian Oil Corporation is keen on a refinery having a capacity of 6 million tonnes per annum (mtpa) in Lanka, its first such overseas project.

At present, Sri Lanka has a single refinery of 2.5mtpa capacity, with demand for petroleum products double the capacity.

In 2014-15, Lanka IOC’s turnover increased 9 per cent to Rs 8,180 crore, and profit after tax rose 65 per cent to Rs 480 crore.

Lanka IOC is the only oil company other than state-owned Ceylon Petroleum Corporation that operates retail petrol and diesel stations.

At present, it has 179 fuel stations in the country.

India is keen on developing Trincomalee as a regional petroleum hub as it is located on a shipping route between oil exporting Gulf nations and energy-starved Asian consumers. It will also provide a ready source of crude to New Delhi at a much competitive price with lower freight charges.

Lanka IOC, a subsidiary of Indian Oil Corporation, operates 15 storage tanks out of 99 in Trincomalee. The Sri Lankan government wants to develop the rest to increase the country’s storage capacity. Each of the storage tanks has a capacity of around 12,000 tonnes.

The 500 megawatt (MW) thermal power plant at Sampur in Trincomalee, which has been delayed for years, is set to pick up pace as the leaders of the two nations have shown keen interest in the project.

NTPC and Ceylon Electricity Board had signed an agreement in 2011 to set up a coal-based power project, the Telegraph India reports.