Nepal, India begin talks to build oil pipeline

Nepal and India have begun talks on developing a much-delayed 41-km petroleum pipeline project between the two countries.

Indian Prime Minister Narendra Modi had pledged during his visit to Kathmandu this month to speed up the project between Amlekhgunj in Nepal and Raxaul in India.

Officials from Nepal Oil Corp (NOC) and Indian Oil Corp (IOC) Wednesday held talks on the probable route for the pipeline, The Kathmandu Post said Thursday.

It said a 12-member IOC delegation arrived in Nepal Tuesday evening.

Wednesday's meeting discussed two alternative routes for the pipeline, 39 km of which will fall in Nepal.

The project, in limbo for two decades, is expected to provide relief to Nepali consumers who suffer frequent shortages of petroleum, caused mainly by strikes.

Bhanu Khanal, chief of NOC's Amlekhgunj depot, was quoted as saying that issues such as land compensation and linking the project with the proposed second international airport at Nijgadh were also discussed.

"We are working on war footing to ensure the timely completion of the project this time," Khanal said.

The Indian government has given the IOC until Aug 24 to submit its preliminary report.

Earlier, a detailed project report of the IOC had suggested that the NOC should lay the pipeline 1.5 meters below the ground.

For this, NOC will not have to purchase land from individual land owners but has to take the the "right of way" permission. However, owners should be compensated for the use of their land.

Land owners should be restricted from developing permanent construction within five meters on either side of the pipeline. They, however, can till their land.

During bilateral talks between NOC and IOC in March 2011, the two sides agreed to form a joint committee to carry out work related to tender and procurement of construction material for the project.

They also agreed to implement the project under separate ownership-joint operation model, dropping the previous idea of a joint venture.

But it failed to gather momentum due to legal and technical complexities.

The IOC proposed the pipeline in 1995. Nepal's cabinet has given the go-ahead for the project more than four times in the last five years.