Petro pipeline deal next month

KATHMANDU:

Nepal and India are preparing to sign the agreement for the construction of the cross-border petroleum pipeline by the second week of April at the government-to-government level.

Construction of the 41-kilometre Amlekhganj-Raxaul petroleum pipeline and expansion of Nepal Oil Corporation (NOC)’s Amlekhganj depot will be done as a single project, as per Jib Raj Koirala, joint secretary of the Ministry of Commerce and Supplies (MoCS).

The total cost estimated for implementation of this project stands at Rs 2.75 billion. Nepal government will also put money in the project. It is reported that the government will seek grant assistance of Rs two billion from the Indian government and finance the remaining amount itself.

MoCS has already drafted the memorandum of understanding (MoU) of the project and sent it to the Ministry of Petroleum and Natural Gas, India for its consent.

NOC and Indian Oil Corporation (IOC) — sole supplier of petroleum products to NOC — would jointly implement the project. NOC and IOC finalised the project implementation agreement during a meeting held in Delhi last week, as per a source at NOC, who is privy to this development. “IOC and NOC will sign the project implementation agreement once the deal is signed at the government-to-government level.”

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.

The cross-border petroleum pipeline was identified as a viable project for petroleum supply to Nepal since a long time. IOC’s Raxaul depot caters to 60 per cent of NOC’s total petroleum import. The pipeline is expected to save Rs 500 million annually while transporting fuel from Raxaul to Amlekhganj. MoCS said there was already a verbal commitment by Indian government quite some time back to construct the pipeline and now MoU will help expedite the project.

Source: THT