India considers laying LPG pipeline to Nepal

India considers laying LPG pipeline to Nepal

After oil, India is now studying feasibility of laying a LPG and gas pipeline to Nepal for supply of cooking fuel to the Himalayan nation.

Nepal currently buys all of its cooking gas (LPG) needs from India, which supplies gas through trucks.


In a meeting with Nepalese Commerce Minister Sunil Bahadur Thapa, Oil Minister Dharmendra Pradhan agreed to “sending a technical team to Nepal to study feasibility of setting up of LPG and natural gas pipeline infrastructure from India to Nepal,” an official statement said here.

Pradhan also assured Nepal of uninterrupted supply of LPG. “…adequate quantity without interruption” will be supplied, the statement said.

The two leaders also discussed the proposal to lay a pipeline from Bihar to Kathmandu for supply of petrol, diesel and ATF.

Five months after India agreeing to foot the cost of the pipeline, the project is stuck over differences on the tenure of fuel supply.

While Indian Oil Corp (IOC), which is to invest Rs 200 crore for laying the pipeline, wants Nepal to commit to buying fuel for 15 years, the Himalayan nation is willing to sign agreement for only five years, official sources said.

The pipeline from Raxaul in Bihar to Amlekhgunj in Nepal in the first phase and to Kathmandu in the next phase, was agreed during Prime Minister Narendra Modi’s visit to the Himalayan nation in August 2014.

Seeking it as a ‘gift’ from New Delhi, Nepal wanted India to foot the cost of laying the project, which IOCBSE 0.03 % agreed.

While IOC and Nepal Oil Corp (NOC) were in broad agreement on the modalities of execution of the project, including the funding options, the duration of the proposed Sale Purchase Agreement was a bone of contention.

IOC, they said, has maintained that the agreement should be for a period of at least 15 years but NOC wants it to be for five years only. It can be renewed with mutual agreement after every five years, the Nepalese firm had conditioned.

While IOC is to fund the project, Nepal is to provide encroachment free pipeline corridor. Also, NOC will have to bear the cost for building fuel storage tanks and other facilities at Amlekhganj.

Work on the 41-km pipeline was to start this month and is targeted for completion by July 2017.

Nepal is dependent on India for meeting all of its fuel requirements. Petrol, diesel, domestic LPG and jet fuel (ATF) are currently trucked from IOC’s depot at Raxaul to Nepal.

“The two sides agreed to continue cooperation in all existing areas and explore avenues ofcooperation in other possible areas of oil and gas sector,” the statement added.

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