Indian Oil signs pact to build $275-cr oil pipeline to Nepal

26 Aug 2015

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Indian Oil Corporation (IOC) has signed an agreement with Nepal Oil Corporation (NOC) to build a Rs275-crore pipeline to transport petroleum products from Raxaul in Bihar to Amlekhgunj in Nepal.

''Subsequent to signing of an MoU between the Government of India and the Government of Nepal on August 24, 2015, IndianOil and NepalOil signed an MoU on August 25 in Kathmandu for construction of Raxaul-Amlekhgunj petroleum product pipeline with a 1.3-million tonne per annum capacity,'' IndianOil said in a statement on Tuesday.

The project involved construction of a 41-km pipeline primarily run through Nepal for supplying petrol, diesel and kerosene and re-engineering of Amlekhgunj depot and allied facilities.

Construction of the pipeline and maintenance work at the Amlekhgunj petroleum depot of Nepal Oil will cost Rs275 crore. IndianOil said that the completion period is 30 months after the receipt of the statutory clearances.

The pipeline was to be funded 50:50 by IOC and Nepal Oil Corp (NOC).

The project, however, never took off as Nepal refused to fund its share of cost. IOC has now agreed to foot the cost in exchange of Nepal committing to buy products for at least 15 years.

IndianOil said the pipeline will ''ensure long-term supply of petroleum products to Nepal as well as stability of supplies from India to Nepal, which will benefit both the countries.''

India had, earlier this month, approved the signing of an agreement to lay an oil pipeline from Raxaul in Bihar to Amlekhgunj in Nepal to supply petrol, diesel and ATF to the land-locked Himalayan Kingdom.

Nepal depends on India for meeting all of its fuel requirements, including petrol, diesel, domestic LPG and jet fuel (ATF), which are currently transported by road from Indian Oil Corp's depot at Raxaul to Nepal.

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