India signs pact for South Asia’s first trans-national oil pipeline
Nepal depends on India for meeting all of fuel requirements, worth some 41 billion. Petrol, diesel, domestic LPG and jet fuel (ATF) are now trucked from Indian Oil Corp’s (IOC) depot at Raxaul to Nepal.
The Indian Government has signed a memorandum of understanding with the Nepalese counterpart for the construction of 41km petroleum pipeline project.
The Minister of State for Petroleum & Natural Gas Dharmendra Pradhan met the Minister of Commerce and Supplies of Nepal Sunil Bahadur Thapa on August. 24, 2015 in Kathmandu.
Kathmandu: India and Nepal on Monday inked an agreement for a 41-km Amlekhgunj-Raxaul petroleum pipeline, with visiting Indian Minister Dharmendra Pradhan saying its construction would be completed within 30 months. “They agreed that the two sides can work to expand cooperation in oil and gas to several other areas”, it added.
IOC will also reengineer the Amlekhgunj petroleum depot to enable it to receive petroleum products through the pipeline.
Only 2 km of the pipeline would be in India and 39 km in Nepal.
The project, however, never took off as Nepal refused to fund its share of cost. “Nepal Oil Corporation will invest Rs 75 crore to develop additional facilities in Amlekhgunj depot”, the statement said.
Once operational, the new pipeline will facilitate a smooth transfer of petroleum products that are now transported through the Indo-Nepal worldwide highway. This would be the first oil pipeline project between two countries in the Saarc region. It will be built by IOC at a cost of Rs 200 crore.
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, the statement said.
Prime Minister Narendra Modi, during his first official visit to Nepal in an address to the Constituent Assembly of Nepal on Aug.04, 2014, had announced the building of the petroleum pipeline to Nepal.