India, Nepal to ink petroleum pipeline deal on Monday

The much awaited Nepal-India petroleum pipeline project is set to take-off with the signing here on Monday of an MoU for construction of the 41-km Amlekhgunj-Raxaul petroleum pipeline with Indian assistance.

Nepal's Minister for Commerce and Supplies Sunil Bahadur Thapa and Indian Minister for Petroleum and Natural Gas Dharmendra Pradhan will sign the framework agreement in this regard.

The Memorandum of Understanding (MoU), to be signed between the two neighbouring countries, is about constructing a petroleum products pipeline from Raxaul (India) to Amlekhgunj (Nepal) and re-engineering of Amlekhgunj Depot and allied facilities.

Pradhan arrived here on Sunday for the signing of the MoU.

Nepal's ministry of commerce and supplies said the MoU would promote bilateral cooperation in the oil and gas sector and secure long-term supply of petroleum products to Nepal.

"It will further help to promote existing close and friendly relations between the two countries and their people. It would help save transportation cost, reduce leakage, and unhindered supply of petroleum products," it said.

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, the Indian embassy here said in a release.

Nepal had requested India during Prime Minister Narendra Modi's visit to the country on August 3-4, last year, for construction of this petroleum products pipeline. Bearing in mind the close and friendly relations between the two nations and their people, this was agreed to by the Indian government.

On behalf of the Indian government, the Indian Oil Corporation (IOC) has been entrusted with the job to construct the pipeline and for 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 IOC will bear an expense of INR 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 IOC and the Nepal Oil Corporation (NOC) -- the state-owned petroleum supply monopoly.

The NOC will also contribute INR 75 crore for re-engineering the Amlekhgunj Depot. Thirty-nine kilometres of the proposed cross-border petroleum pipeline lies in Indian territory and the remaining two kilometres in Nepal.