Nepal-India to sign MoU for petro pipeline
KATHMANDU:
Nepal and India have been preparing to ink the memorandum of understanding (MoU) for construction of cross-border petroleum pipeline. However, financial modality of the project is yet to be finalised.
The government has been seeking the Indian government’s grant assistance for the integrated project — Amlekhgunj- Raxaul pipeline and Amlekhgunj depot expansion — according to Jib Raj Koirala, joint secretary at the Ministry of Commerce and Supplies (MoCS).
“If the Indian government agrees to extend assistance for the integrated project, it will be government-to-government (G2G) assistance and conditions will be more simplified.” However, it is not clear whether or not the Indian government will award a grant for the proposed project.
Still, the government is well prepared even if the southern neighbour does not extend the grant assistance. The 41-km pipeline will be constructed with the Indian Oil Corporation (IOC)’s grant assistance and the government plans to utilise its own resources for depot expansion.
As per the IOC, the total cost of pipeline is estimated at IRs 1.5 billion, and IOC has already proposed to construct the pipeline with its own resource as a business-to-business (B2B) assistance for Nepal Oil Corporation (NOC).
IOC originally proposed to build the pipeline under the B2B model during the bilateral talks held here on November 8.
Joint Secretary Koirala and NOC Managing Director Chandika Prasad Bhatta are involved in MoU drafting and it is likely to be submitted to the Minister for Commerce and Supplies Sunil Bahadur Thapa on Wednesday. Minister Thapa will lobby with his Indian counterpart for the grant assistance. He had requested with his Indian counterpart Nirmala Sitharaman for the grant assistance to construct the cross-border petroleum pipeline during his visit to India in August.
“The MoU will be framework pact for pipeline construction,” Koirala said, adding, “That will deal with financial, technical and operational modalities.”
Source: THT
