As per IOC’s proposal, the pipeline would be financially viable only if the products are pumped uninterrupted for the next 25 years.

A week ago, the government had formed an expert committee comprising representatives from both the sides, asking it to recommend appropriate model for the much-touted cross-border pipeline project.

“The Indian side has shown its readiness to invest in the project,” said Deepak Baral, director at NOC’s engineering and projects division. Baral, who is also a member of the joint committee, said it will be mandatory for NOC to buy petroleum solely from IOC once the agreement is done.

However, some NOC officials said the state-owned oil company might miss opportunities that may come in the future if it sings the “binding” deal. “On the positive side, Nepal will not have to invest in the project. The pipeline will also ensure smooth supply of quality fuel and help get rid of shortage induced by strikes,” the officials said.

The proposed pipeline is expected to save fuel transportation cost by 40 percent.

According to NOC, the final assessment report will be submitted to the Ministry of Commerce and Supplies on Monday. IOC will also submit the report to the Indian government. Both the countries will then finalise the draft, following which the financial matter will be settled thorough high-level government talks.

The agreement is expected to be signed during Indian Prime Minister Narendra Modi’s Nepal visit for the Saarc Summit slated for November 26-27.

The draft report has also left open the option for private sector firms to use the petroleum pipeline for procuring fuel by paying a certain tariff.