The much awaited Nepal-India petroleum pipeline of the 41-km Raxaul (India) - Amlekhgunj (Nepal) project is set to take-off with the signing of Memorandum of Understanding (MoU) between the two countries. Minister of State (I/C) for Petroleum & Natural Gas Dharmendra Pradhan is on Nepal visit to sign the agreement to ensure unhindered supply of oil and gas to the land-locked Himalayan nation.
This project is estimated to cost Rs 275 crore and is expected to be completed in three years. Indian Oil Corporation (IOC) will provide Rs 200 crore while the remaining Rs 75 crore will be provided by Nepal Oil Corporation (NOC). Further, out of 41 km long petroleum pipeline about 39 km would lie in Nepal.
The project will be completed in two phases. In the first phase, a petroleum products pipeline from Raxaul to Amlekhgunj would be constructed, where IOC will bear the project cost. IOC has agreed to foot the cost in exchange for Nepal committing to buy products for at least 15 years. There will be a long term contract of 15 years (initial contract for five years extendable for two terms of five years each) between IOC and NOC.
This agreement would promote bilateral cooperation in the oil and gas sector and secure long-term supply of petroleum products to Nepal and promote friendly relations between the two countries. It would also help save transportation cost, reduce leakage, and unhindered supply of petroleum products
Last year Nepal had requested India during the visit of Prime Minister Narendra Modi to Nepal for the construction of this petroleum products pipeline. Bearing in mind the close and friendly relations between the two nations, this was agreed to by the Indian government.
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