MoCS prepares MoU for petroleum pipeline

KATHMANDU:

The long-awaited Nepal-India petroleum pipeline deal may gather pace as Nepal has already drafted a memorandum of understanding (MoU) which could soon be signed by both the countries. Based on the report of the technical committee comprising officials of Nepal Oil Corporation (NOC) and Indian Oil Corporation (IOC), which was formed last November, the Ministry of Commerce and Supplies (MoCS) has drafted the MoU of the cross-border pipeline that is going to be signed at a government-to-government level. As per the draft, Nepal will propose the Indian government to construct the 41-km cross-border petroleum pipeline under grant assistance. The project which also includes the expansion of Amlekhganj depot is expected to cost Rs 2.75 billion. Nepal will seek about Rs two billion in grant assistance from southern neighbour to implement the project. Thirty-nine kilometres of the proposed Raxaul-Amlekhganj petroleum pipeline lies on Indian territory and remaining two kilometres in Nepal and both the public

entities have already finalised the technical modality of the project. Earlier, IOC had proposed the project as business-to-business (B2B) assistance. However, it did not materialise due to various circumstances and now the project will be dealt at the government level. IOC is the sole supplier of petroleum products to NOC and its Raxaul depot caters to 60 per cent of NOC’s total petroleum import. The proposed pipeline is expected to save Rs 500 million annually while transporting fuel from Raxaul to Amlekhganj. MoCS said that there was already a verbal commitment by the Indian government quite some time back to construct the petroleum pipeline and now the MoU will help expedite the project. IOC will be responsible for implementing project.The meeting of NOC and IOC officials held in November last year in the presence of MoCS Joint Secretary Jib Raj Koirala and Additional Secretary of Indian Ministry of Petroleum and Natural Gas Rajiv Kumar had formed a technical team comprising officials of both sides to sub

mit a detailed report regarding the project to their respective governments.MoCS has said that it will formally approach the Indian Ministry of Petroleum and Natural Gas for the MoU to be signed through the Ministry of Foreign Affairs after the memorandum is approved by the Cabinet.The draft has at the moment been forwarded to the Ministry of Law, Justice, Constituent Assembly and Parliamentary Affairs for its feedback. MoCS said thatthe MoU will be forwarded to the Cabinet for approval after incorporating the suggestions of the Law and Justice Ministry.

Source: THT