Indian team to visit Nepal to finalise draft MoU
KATHMANDU, NOV 02 -
A seven-member delegation from India’s Oil Ministry and Indian Oil Corporation (IOC) are scheduled to visit Nepal on November 6 to finalise the draft of the Memorandum of Understanding (MoU) for the development of Nepal-India cross-border petroleum pipeline.
The team will be led by Rajive Kumar, additional secretary of India’s Ministry of Petroleum and Natural Gas.
According to officials at Nepal Oil Corporation (NOC), the draft MoU is likely to be formalised during Indian Prime Minister Narendra Modi’s visit to Nepal to attend the Saarc Summit scheduled to begin from November 26.
The two countries have finalised a survey draft for the 41-km Amlekhgunj-Raxaul petroleum pipeline, but its financial modality has yet to be discussed, said NOC Spokesperson Mukunda Ghimire.
Earlier, the Indian government had to pledged develop the project in grant. However, with Finance Minister Ram Sharan Mahat making public remarks that Nepal should also pump some money into the project, talks on the commercial/financial modality of the project has not moved ahead. “The meeting will also discuss this issue,” Ghimire said.
Other agendas include whether Nepali private sector companies will have access to the products supplied through the pipeline once they enter the oil business, Ghimire said.
In September, a joint NOC-IOC team concluded the pipeline survey in three phases. The survey has proposed a road-to-road alignment, or laying down the pipeline along the 26-km Amlekhgunj-Patliya Road, and 12-km forest areas as the first option.
The second option is laying the pipeline on the 12-km forest fire-line and 25-km agricultural land opposite Simara Airport. It will also intersect sections of the road without causing too much damage to the existing forest cover.
Under the third option, the pipeline will pass through the 17-km railway track in forest areas, 20-km agricultural land and 3-km road. Nepal has to acquire a 1.8km patch in the Indian territory, of which 1km lies along a railway track and the rest consists of agriculture fields. The project cost has been estimated at around Rs 9 billion. Of the total cost, pipeline construction and land acquisition costs are estimated at Rs 4 billion. Rest of the funds will be used for other work, including capacity upgradation of NOC’s Amlekhgunj depot, its automation, and construction of a pumping station.
The survey has proposed building three vertical fuel tanks to store diesel at Amlekhgunj depot. Each tank will have 16,000kl capacity. The depot’s current capacity is 15,700kl. Four additional tanks, two each for petrol and aviation turbine fuel, have been proposed with a combined capacity of 12,000kl.
IOC had proposed building the cross-border pipeline in 1995. A memorandum of understanding was signed between NOC and IOC in September 1996 at the junior executive level. In 2004, another agreement was reached at the chief executive level.
The much-delayed project gathered pace after Indian Prime Minister Narendra Modi, during his Nepal visit in first week of August, promised constructing the pipeline. The pipeline is expected to reduce transportation costs by 40-50 percent, control leakage and ensure hassle-free transfer and quality of petroleum products.
Source: The Kathmandu Post
