MOU between India and Nepal for construction of petroleum products pipeline

Pipeline from Raxaul (India) to Amlekhgunj (Nepal) and re-engineering of Amlekhgunj Depot and allied facilities

The Union Cabinet chaired by the Prime Minister, Shri Narendra Modi, gave its approval for the signing of a Memorandum of Understanding (MoU) between the Government of India and the Government of Nepal for the construction of a petroleum products pipeline from Raxaul (India) to Amlekhgunj (Nepal) and re-engineering of Amlekhgunj Depot and allied facilities.

The MoU will promote bilateral cooperation in the oil and gas sector and secure long term supply of petroleum products to Nepal. It would help preserve the environment along the route and decongest the international border at Raxaul.

Background:

The Government of Nepal had requested the Government of India, during the visit of the Prime Minister to Nepal on 3-4th August, 2014 for the construction of this petroleum products pipeline. Bearing in mind the close and friendly relations between the two countries and their people, this was agreed to by the Indian Government.

On behalf of Indian Government, the Indian Oil Corporation has been entrusted with the job of construction of the pipeline and re-engineering of the Amlekhgunj Depot and allied facilities. The project will be completed in two phases. In the first phase, a petroleum products pipeline from Raxaul in India to Amlekhgunj in Nepal would be constructed. The Indian Oil Corporation will bear a cost of Rs. 200 crore for the first phase of the project. There will be a long term contract of 15 years (initial contract for five years extendable for two terms of five years each) between the Indian Oil Corporation and the Nepal Oil Corporation.

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