Petroleum and Natural Gas Minister Pradhan and his Nepalese counterpart Sunil Bahadur Thapa inked the Memorandum of Understanding for the construction of the pipeline from Raxaul (India) to Amlekhgunj (Nepal) and re-engineering the Amlekhgunj Depot and allied facilities.
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This will be the first trans-national petroleum pipeline in South Asia and forms part of Prime Minister Narendra Modi’s vision of improved regional connectivity among SAARC countries. In 2006, a 41-km pipeline from Raxaul to Amlekhgunj in Nepal was proposed for transportation of the fuel.
Indian Oil Corporation will provide Rs 200 crore while the remaining Rs 75 crore will be provided by Nepal Oil Corporation, according to officials.
The minister suggested to the Nepalese side to extend the pipeline up to Kathmandu, adding that India would extend all possible help to Nepal in this regard. Petrol, diesel, domestic LPG and jet fuel (ATF) are now trucked from IOC’s depot at Raxaul to Nepal.
Both agreed that India and Nepal can take steps to expand cooperation in oil and gas to several other areas. The 41-kilometre pipeline – 2 km in India and 39 km in Nepal – will initially supply petrol, diesel and kerosene. There will be a long-term contract of 15 years (initial contract for five years extendable for two terms of five years each) between IOC and the Nepal Oil Corporation (NOC) – the state-owned petroleum supply monopoly. It will take IOC about 30 months to complete the project after receipt of necessary statutory clearances from Nepal. IOC will bear the cost for the first phase of the project. This will also ensure smooth, cost effective and environment friendly supply of petroleum products to Nepal.
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Nepal receives Indian petroleum products worth about $1.1bn annually. Bulk of this volume will be transported through this pipeline.
