India pipeline project approved

An oil pipeline from Raxaul, India, to Amlekhgunj, Nepal, has been approved for construction and signed by the Cabinet. The pipeline will supply petrol, diesel and ATF to the Himalayan Kingdom.

The signing

The approved and signed Memorandum of Understanding (MoU) between the Indian and Nepalese governments allows for the pipeline construction and re-engineering of Amlekhgunj’s depot facilities.

India and Nepal’s relationship

Nepal is dependent on India for its fuel requirements, as they are currently transported from Indian Oil Corp’s depot at Raxaul.

Past pipeline proposals

The 41 km pipeline from Raxaul to Amlekhgunj was proposed in 2006, and was to be funded 50/50 by IOC and Nepal Oil Corp. however, as Nepal refused to fud the shared cost, the project never began.

Now, IOC has agreed to pay the cost of the construction in exchange for Nepal’s commitment of purchasing its products for at least 15 years.

"The MoU will promote bilateral cooperation in the oil and gas sector and secure long term supply of petroleum products to Nepal. It would help preserve the environment along the route and decongest the international border at Raxaul.”

Edited from various sources Business Standard, Ekantipur, The Economic Times,  by Stephanie Roker

Published on 14/08/2015

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