India, Nepal sign petroleum product pipeline deal

Nepal Foreign Affairs (Kathmandu, August 25) : India and Nepal on Monday signed an MoU on a petroleum Product Pipeline which will be built from Raxual in India to Amlekhgunj in Nepal.

Indian Minister of State (I/C) for Petroleum & Natural Gas Dharmendra Pradhan and Nepal’s Minister of Commerce and Supplies Shri Sunil Bahadur Thapa inked the deal on Monday in Kathmandu.

The two Ministers reviewed bilateral cooperation in the petroleum sector. They agreed that the two sides can work to expand cooperation in oil and gas to several other areas.

As per the petroleum deal, the Indian Oil Corporation will also do reengineering of the Amlekhgunj petroleum depot to make it compatible with receiving petroleum products by pipeline.

According to the deal, the 41 km pipeline (2 km in India and 39 km in Nepal) which will initially supply Petrol, Diesel and Kerosene will be constructed by Indian Oil Corporation at a cost of app. Rs. 200 crore, from its own budget. It will take IOC 30 months to complete the project after receipt of necessary statutory clearances from Government of Nepal. Nepal Oil Corporation will invest Rs 75 crore to develop additional facilities in Amlekhgunj depot.

India exports about US$ 1.1 billion worth of petroleum products per annum to Nepal. Bulk of this volume will be transported through this pipeline. This will also ensure smooth, cost effective and environment friendly supply of petroleum products to Nepal.

It may be recalled that Indian Prime Minister Narendra Modi, during his first official visit to Nepal in an address to the Constituent Assembly of Nepal on 4 August 2014, had announced the building of the petroleum pipeline to Nepal.

“This is a major step in the direction of fulfilment of the announcement made by Prime Minister Modi. Recently, the Indian Cabinet had approved this MoU,” read a statement issued by the Indian Embassy in Nepal.

It may also be noted that this would be the first transnational petroleum pipeline in South Asia and will be a significant step towards Prime Minister Modi’s vision of improved regional connectivity among SAARC countries. Pradhan was accompanied by Ambassador of India, senior officials from MoPNG, MEA and Chairman, IOC.

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