Kathmandu [Nepal], August 2 : The second phase of the petroleum pipeline project, being carried out with assistance from the Indian Government and extending from Nepal's Amlekhgunj in Bara to Lothar in Chitwan, has officially commenced.
Alongside the pipeline expansion, the government aims to construct a petroleum storage facility with a three-month storage capacity.
The Nepal Oil Corporation (NOC) inaugurated the field office of the project in Lothar, marking the formal start of the pipeline extension.
A state-of-the-art Greenfield terminal will be constructed on approximately 23 bighas and 12 kathhas of land in Nepal's Rapti Municipality-1 in Lothar.
According to NOC, "Petroleum products will be pumped directly from the Indian Oil Corporation's (IOC) Motihari depot to Lothar. A 10.75-inch pipeline will be laid over a 62-kilometre stretch between Amlekhgunj and Lothar."
Project Chief Pradeep Kumar Yadav stated that all necessary documentation for the pipeline expansion has been completed. "Road construction and coordination with IOC will begin immediately, with plans to complete and operate the project within three years," Yadav confirmed to ANI over the phone.
Yadav emphasised that the pipeline will minimise environmental impact, reduce fuel theft, and prevent adulteration and also assured that the project would coordinate with locals, providing employment and other opportunities.
Siddhalal Syangtang, Ward Chairperson of Rapti Municipality-1, expressed enthusiasm, calling it a prestigious project for the Chitwan region.
Assistant Manager Anupam Parajuli informed that the pipeline will supply petroleum at a rate of 273 kilolitres per hour. "The pipeline will run parallel to the East-West Highway and is expected to transport up to 2 million tonnes of fuel annually," Parajuli said.
The project will also include the construction of a pipeline station on a 160-square-meter plot in Lothar. Additionally, three vertical tanks with an 11,000-kilolitre capacity each will be built for petrol storage.
Three more tanks with a combined capacity of 15,500 kilolitres will store diesel, and two tanks with an 800-kilolitre capacity will be constructed for kerosene storage.
South Asia's first cross-border petroleum pipeline, linking Motihari (India) and Amlekhgunj (Nepal), was completed before the 2019 COVID-19 pandemic.
The 78-kilometre-long petroleum pipeline includes 36 kilometres in Indian territory and 42 kilometres inside Nepal, stretching from the Indian border town of Raxaul to Amlekhgunj in Bara district, Nepal.
The first petroleum pipeline, extending from India's Motihari to Amlekhgunj in Parsa, was jointly constructed by the Indian and Nepali governments. The Nepal Oil Corporation covered the construction costs on behalf of the Government of Nepal.
Both governments have now agreed to extend it further to Lothar in Chitwan, and groundwork for the extension has already begun.
The Indian government invested Rs 3.5 billion in the pipeline from Motihari to Amlekhgunj. Nepali Prime Minister KP Sharma Oli and his Indian counterpart, Prime Minister Narendra Modi, jointly laid the foundation stone for the project at Hyderabad House in New Delhi during Oli's 2018 visit to India.
The governments of Nepal and India signed the agreement for the pipeline's construction on August 24, 2015, in Kathmandu, during a visit by Union Petroleum Minister Dharmendra Pradhan.
Approximately 70 per cent of Nepal's petroleum imports pass through the Amlekhgunj point.
Additionally, on October 3, 2024, India and Nepal signed a B2B Framework Agreement to develop a petroleum pipeline and storage facility in Nepal. The agreement was signed between the Nepal Oil Corporation and the Indian Oil Corporation.
According to Indian Ambassador to Nepal Naveen Srivastava, who made the announcement on October 4, 2024, the B2B agreement with the Indian Oil Corporation includes the development of new oil pipelines from Siliguri to Jhapa in Nepal.
"There is also an agreement that Indian Oil Corporation will build two new Greenfield terminals for storing oil and petroleum products in Jhapa and Chitwan. These agreements are follow-ups to those signed during former Prime Minister Prachanda's visit to India last year," Ambassador Srivastava said.
As per the B2B Framework Agreement, a 50-kilometre petroleum pipeline from Siliguri, India, to Charali in Jhapa will be built. Additionally, a Smart Greenfield Terminal with a capacity of 18,900 kilolitres will be constructed at Charali.
The Government of India will provide a grant for implementing a 62-kilometre petroleum pipeline from Amlekhgunj to Lothar in Chitwan. Similarly, at Lothar, a Smart Greenfield Terminal with a capacity of 91,900 kilolitres will be built by NOC with technical assistance from the Indian government.
The total cost of these projects is estimated at Rs 15 billion. The Memorandum of Understanding (MoU) was signed during former Prime Minister Pushpa Kamal Dahal's visit to India in May-June 2023.