Tanker carrying 2MMbbl of Kuwaiti oil ablaze off Sri Lankan coast

(Bloomberg) - An oil tanker loaded with two million barrels of Kuwati crude sailing toward India’s Paradip refinery caught fire Thursday morning off Sri Lanka’s coast, raising concerns about an oil spill.

The fire in the engine room of New Diamond, a very large crude carrier, was caused by an explosion, said Sri Lanka Navy spokesman Indika de Silva. “Fire is still in the engine room and hasn’t spread out.”

Sri Lanka Navy deployed two vessels for rescue operation, Indian Coast Guard diverted three ships and an aircraft, while clean tanker Helen M has also been pressed into assistance.

While, there have been no reports of large-scale oil leakage, Sri Lankan authorities are deploying equipment to prevent pollution, while India is sending ships to douse the fire. The area is south of a belt well known for whale sightings, and any oil spill could threaten marine life in the region.

New Diamond is about 65 kilometers (40 miles) off the east coast of Sri Lanka, according to ship-tracking data compiled by Bloomberg. The cargo was loaded at Mina al Ahmadi on Aug. 23 and scheduled to arrive at Paradip on Sept. 5.

“A slight oil leak is visible,” said Dharshani Lahandapura, chairperson of Sri Lanka’s Marine Environment Protection Authority. “We are analyzing the situation. It will be huge disaster if the spill occurs.”

Twenty of the 23 New Diamond crew have been rescued, with two of the remaining three accounted for, while one is missing, de Silva said.

The vessel was chartered by Indian Oil Corp., a spokesman for India’s biggest state refiner said. Indian Oil operates a 15-million-ton-a-year oil refinery at Paradip in India’s eastern state of Odisha.