Cross-border oil pipeline project stirs back to life

- Rajesh Khanal, Kathmandu

Jun 4, 2016-The long-planned cross-border oil pipeline project which went into hibernation after India imposed a trade embargo against Nepal looks like waking up. The proposed pipeline will be 41 km long and extend from Raxaul, India to Amlekhgunj, Nepal.

According to Nepal Oil Corporation (NOC), a five-member team consisting of representatives from the company and the Supply Ministry are scheduled to visit New Delhi next Monday to discuss the possibility of expediting the scheme.  

Supply Secretary Shree-dhar Sapkota will be leading the delegation which also includes NOC’s Managing Director Gopal Bahadur Khadka. “The team will hold discussions on various issues related to petroleum supply and implementation of the pipeline project as soon as possible,” said NOC spokesperson Mukunda Ghimire. 

As per the plan, a joint monitoring team of NOC and Indian Oil Corporation (IOC) will be formed to oversee the project status. The team will meet IOC chief B Ashok in Delhi. The monitoring team will set up a liaison office to create a one-door project mec- hanism, according to officials. 

The government’s move to expedite the project 10 months after signing a memorandum of understanding (MoU) to build the pipeline follows a request letter from IOC. The Indian corporation had written to NOC two months ago to take the project forward. 

In August 2015, Nepal and India signed an MoU to construct the petroleum pipeline which has been 20 years in the planning. The pipeline is expected to ensure regular fuel supplies in Nepal which are known to be disrupted by recurring road blocks and strikes. The Rs4.4-billion project is expected to be completed within 30 months after work begins. IOC will be injecting Rs3.2 billion into the project as a grant while NOC will invest the rest of the amount for the upgradation of its Amlekhgunj depot.

The pipeline will transport petrol, diesel and kerosene. Under the first phase of the project, a pipeline will be laid from Raxaul to Amlekhgunj. In the second phase, it will be extended to Kathmandu.

IOC had proposed constructing a cross-border pipeline in 1995 and signed an MoU with NOC at the junior executive level a year later. In 2004, the two sides upgraded the agreement to the chief executive level. However, due to a number of legal hurdles, the project failed to take off.

The plan received a shot in the arm after Indian Prime Minister Narendra Modi’s visit to Nepal in August 2014 when he pledged to build the pipeline.

Published: 04-06-2016 08:18

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