The next stage in the salvage of the fire-damaged VLCC off Sri Lanka is set to begin after salvors removed water from its flooded engine room.

Salvors are understood to have deballested the machinery space on the 300,000-dwt New Diamond (built 2000) by transferring water to its ballast tanks, according to Indian authorities.

It has also been reported that all leaks on the ship’s hull have now been sealed following an underwater inspection by a combined dive team from the salvors as well as the Sri Lankan and Indian navies.

A spokesperson for the Indian coastguard said the New Diamond was now “assessed pollution free and ready to be towed”.

The tanker, which caught fire after an engine room explosion on 3 September, is reported to be about 95 kilometres (59 miles) from Sri Lanka coast.

It was carrying 270,000 tons of crude oil from Kuwait to the Indian port of Paradip when it caught fire.

The Boskalis-owned ocean-going tug and firefighting vessel Boka Expedition (built 2007) is said to have taken over the tow of the fire damaged VLCC.

The extent of the fire damage to the New Diamond. Photo: Indian navy

Separately, reports in the Sri Lankan media said the country’s attorney general has held discussions with relevant government bodies over the next step in the vessel’s salvage.

Representatives from the Marine Environment Protection Authority, the Sri Lanka Ports Authority, the Sri Lanka navy, the coastguard, the Ceylon Petroleum Corp and the Merchant Shipping Department are said to have been present.

The discussions are understood to have focused on the cost of extinguishing the fire aboard the vessel and obtaining compensation from insurers.

Smit Salvage is undertaking the salvage under a Lloyd’s Open Form contract with special compensation protection and indemnity clause.

The hull of the New Diamond has yet to be declared a constructive total loss, but insurance experts suggest that — given the ship’s age and the extensive fire damage — it is unlikely hull and machinery insurers will seek to save and rebuild the vessel.

The insured value of the hull is unknown, but it has a market value of about $21m, according to VesselsValue.