Motihari-Amlekhgunj oil pipeline to start commercial operation next month

India and Nepal have successfully concluded the 'testing transfer' of the Rs 325 crore Motihari-Amlekhgunj oil pipeline and the strategically important project is set to start commercial operation next month, officials said here Friday.

Along with reducing the huge transportation cost for the landlocked country, the commercial operation of the oil project will also ensure reduction in fuel prices.

The Nepal Oil Corporation (NOC) and the Indian Oil Corporation Limited (IOCL) have successfully concluded the 'testing transfer' of the Motihari-Amlekhgunj pipeline project, the officials said.

Addressing a programme in Kathmandu on Thursday, Indian Ambassador to Nepal Manjeev Singh Puri said the India-Nepal petroleum pipeline will be a "game changer for Nepal".

The 69-km long petroleum pipeline from Motihari in Bihar to Amelkhgunj in Nepal has been constructed by India.

"The Motihari-Amlekhgunj pipeline will help in tackling the oil storage problem in Nepal and doing away with transportation of petroleum products through tankers. It will ensure smooth, cost effective and environment-friendly supply of petroleum products to Nepal," Puri said.

The Motihari-Amlekhgunj oil pipeline project was first proposed in 1996. However, the project finally edged closer to reality during Prime Minister Narendra Modi's visit to Kathmandu in 2014.

The two governments had inked an agreement to execute the project in August 2015. However, the project construction was delayed following the 2015 earthquake and supply obstruction along the southern border.

The project construction works finally began in April last year with the mandate to complete it within 30 months.

"Commercial operation of the cross-border fuel project will bring down fuel price by at least one rupee per litre," said Sushil Bhattarai, NOC Deputy Executive Director.

Though the initial cost of the project was estimated to be Rs 275 crore, where the Indian government would inject Rs 200 crore, the NOC said total project cost escalated to almost Rs 325 crore due to the delay.

The project will start commercial operation by August, the Indian embassy officials said here.

The NOC also said the two governments are working to ensure that the inauguration of the project takes place in the first week of August.

As the project has been completed and is awaiting its formal inauguration, Nepal will officially start fuel trade with India via the pipeline after Prime Minister K P Sharma Oli and his Indian counterpart Modi formally launch operation of the project.

Though the date for the official inauguration of the project is yet to be fixed, the Ministry of Foreign Affairs and Nepal Oil Corporation confirmed that groundwork is under way to virtually inaugurate the project by the two prime ministers.

The virtual inauguration of the project will be done via video conference, where the two prime ministers will press a button in New Delhi and Amlekhgunj, resulting in the opening of the valve of the petroleum pipeline, the NOC said.