Nepal Oil Corporation ( NOC ) has proposed Indian Oil Corporation (IOC) to develop the Amalekhgunj-Raxual petroleum pipeline as a “gift project”.
During bilateral talks held in New Delhi a few days ago, the Nepali side asked the Indian side to build the pipeline and hand it over to Nepal. The estimated cost of the project is IRs 5.5 billion.
After Indian Prime Minister Narendra Modi, during his recent Nepal visit, promised constructing the pipeline, optimism has grown about the project development.
After arriving Nepal on Sunday from India, Managing Director Chandika Prasad Bhatta said they asked IOC officials to construct the project as per Modi’s promise.
“We also asked them not to put this project under other infrastructure projects that will be financed under the line of credit worth $1 billion announced by Modi, but rather implement it as separate project,” said Bhatta, who led the six-member NOC delegation in the talks.
According to Bhatta, IOC officials are positive on NOC ’s proposal. “They have indicated that IOC could make the entire investment provided the two governments
reach a consensus,” said Bhatta, adding NOC would write to the government on Monday asking the latter to forward a “request letter” to the Indian government soon.
Of the total cost, pipeline construction and land acquisition costs are estimated at IRs 2.5 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 proposed cross-border pipeline is estimated to be 43km long and extend from the bordering Indian town of Raxaul to Nepal’s Amalekhgunj.
Last week, a 12-member IOC delegation had also held discussions over the issue with the NOC officials in Kathmandu.
Earlier, a joint field survey conducted by the two sides showed the pipeline would pass through 25km of farmland and 16km of jungle. Nepal has to acquire a 1.8km patch in the Indian territory, of which 1 km lies along a railway track and the rest consists of agricultural fields.
After the pipeline is constructed, Nepal will receive petroleum products at the rate of 190 kilolitres per hour. As per the survey, Nepal needs to enhance the capacity of the Amlekhgunj depot for stocking adequate amount of petroleum products.
The Amlekhgunj depot, as per NOC officials, has the capacity of stocking 1,900kl petrol, 10,800kl diesel and 5,600kl kerosene. However, it does not have a separate warehouse for stocking aviation fuel.
Bhatta said the Indian side also asked the Nepali team to start the process of land acquisition as soon as possible. “They have hinted once the land acquisition process is over, they could complete construction of the project within 30 months after the construction starts,” he said.
A high-level IOC delegation is also scheduled to visit Nepal next week to initiate baseline work on the project.