| July 19, 2019

Nepal, India sign MoU to implement petroleum pipeline

Nepal, India sign MoU to implement petroleum pipeline DIPESH SHRESTHA
KATHMANDU, Aug 24: Nepal and India on Monday signed the Memorandum of Understanding (MoU) for implementation of the much waited Raxaul-Amlekhgunj Petroleum Pipeline Project.

Minister for Commerce and Supplies Sunil Bahadur Thapa and India's Minister of State for Petroleum and Natural Gas Dharmendra Pradhan signed the MoU on behalf of their respective governments.

Addressing the signing ceremony, Thapa said the MoU on petroleum pipeline project has fulfilled two-decade-old dream. Terming the agreement as 'historic', he said Nepal will leave no stone unturned to complete the project before the set timeframe in coordination with the Indian Oil Corporation (IOC) and the Indian government.

"The cross-border pipeline project is becoming a reality in the initiation of Indian Prime Minister Narendra Modi. My special gratitude goes to Prime Minister Modi as well as other officials of the Indian government," he added.

As per the MoU, the pipeline project has to be completed within 30 months.

On the occasion, Thapa also thanked IOC for ensuring effective supply of petroleum products to Nepal in the aftermath of the devastating earthquake. "The petroleum pipeline project will ensure smooth supply of petroleum products to Nepal, help Nepal Oil Corporation (NOC) to save huge transportation cost, and help maintain purity of petroleum products," Thapa added.

Similarly, Minister of State Pradhan said IOC and NOC have to work together to turn the dream project into reality. "Prior to my visit to Nepal, Prime Minister Modi had asked me when the project will be completed," Pradhan said, adding, "I am optimistic that the project will be completed ahead of the set timeframe if IOC and NOC work in proper coordination."

He also said the Indian government was ready to support Nepal and NOC to expand liquefied petroleum (LP) gas distribution in remote areas of Nepal.

On the occasion, Commerce Secretary Naindra Prasad Upadhaya said the pipeline project will be a milestone in Nepal-India trade relation.

The 41-kilometer cross-border pipeline project will cost IRs 2.75 billion. Indian government is providing IRs 2 billion for development of project as grant, while Nepal is investing IRs 750 million. The two-kilometer section of the pipeline will be in India, and the remaining 39 kilometers in Nepal.

According to officials, the pipeline will be of international standard with necessary safety and security system. While Indian investment will be used to lay down petroleum pipeline, Nepali investment will be used to restructure and automate the Amlekhgunj depot of NOC and to build a pumping station, they said.

With the signing of MoU, IOC will be the sole distributor of petroleum products for Nepal for another 15 years. The initial contract will be five years which can be extended to two terms of five years each.

Officials of both the countries have said that the project will work as a basis for expansion of petroleum pipeline network across the country Nepal. IOC and NOC also plans to expand 100 km pipeline to Kathmandu along the Nijgadh-Kathmandu fast track and another 80-100 km to Chitwan from Kathmandu.