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NOC-IOC to finalise pipeline draft agreement next week | Nepali Economy
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NOC-IOC to finalise pipeline draft agreement next week

An Indian Oil Corporation (IOC) team is visiting Kathmandu on Sunday to finalise draft agreement to construct cross border petroleum pipeline.

A six-member IOC delegation will reach Kathmandu on Sunday, informed Nepal Oil Corporation (NOC). “The team will in a three-day meeting with NOC give a final shape to the proposed Amlekhgunj-Raxaul cross-border petroleum pipeline,” it said, adding that the final draft will be sent to the cabinets of both the countries to get approval. “After which Commerce and Supplies Ministry and India’s Petroleum Ministry will sign the bilateral agreement.”

The meeting is expected to finalise technical modalities, including the land acquisition process.

In the last meeting in Amlekhgunj on August 24, the teams of both the countries had agreed to acquire land and distribute compensation within three months. The 43-km proposed cross-border pipeline from the Indian border town of Raxaul to Amlekhgunj is expected to be completely constructed by the Indian government as requested by Nepal last week.

The visitors will also hold discussions with Ministry of Commerce and Supplies, apart from inspecting the Amlekhgunj depot that will be upgraded under the pipeline package. According to the study, Nepal needs to enhance the capacity of Amlekhgunj depot for stocking adequate amount of petroleum products.

NOC has decided to build three vertical fuel tanks to store diesel at the Amlekhgunj depot. Each tank will have 16,000kl capacity. The depot’s current capacity is 15,700kl. It does not have a separate warehouse for stocking aviation fuel.

Likewise, four additional tanks, two each for petrol and aviation turbine fuel, have been planned with a combined capacity of 12,000kl. With this infrastructure in place, NOC’s Amlekhgunj depot will have a capacity to stock more than 15 days’ worth of fuel in the event of an emergency.

The ambitious project has started moving after Indian Prime Minister Narendra Modi’s visit to Kathmandu on August 2-4. Modi promised to construct the pipeline.

After the pipeline starts flowing petroleum products to Nepal, the country will receive fuel at the rate of 190kl per hour.

Likewise, the pipeline is expected to reduce transportation costs by 40 per cent to 50 per cent, control leakage and ensure hassle-free transfer and quality of petroleum products.