Laxmi Capital News
India-Nepal oil pipeline formally launched

69-km pipeline fromMotihari in Bihar state to Amlekhganj, Nepal expected to save over Rs 1billionin transport cost, technical loss.

Themuch-awaited India-Nepal pipeline project has been  launched jointly byPrime Minister KP Sharma Oli and his Indian counterpart NarendraModi amid afunction held at Hyderabad House, New Delhi. They participated remotely in theground-breaking ceremony marking a formal start to the laying of thecross-border pipeline from India's Bihar state to Nepal.  

The 69-kmpipeline from Motihari in Bihar to Amlekhganj in Nepal will have a capacity ofsupplying 2 million tons of petroleum products per annum. The project isestimated to cost Rs 4.4 billion. Under a previous agreement between Nepal andIndia, India will finance Rs 3.2 billion of the cost and the Government of Nepal will contribute Rs 1.2 billion . 
Indian Oil Corporation (IOC), the Indian government-owned oil and gas companywhich supplies petroleum products to Nepal, is implementing the pipeline projectwhile Nepal's oil monopoly Nepal Oil Corporation (NOC) will requisition landfor the project on the Nepal side. The laying of the pipeline is, however,already underway. 

NOCofficials say that the pipeline project will be completed in 30 months. Accordingto them, Nepal can save over Rs 1 billion annually in transport cost andreduced technical loss once the pipeline comes into operation. 

Though theproject was  initially meant to construct a pipeline from Raxaul  toAmlekhgunj, this was later extended  to Motihari after IOC shifted itsdepot from Raxaul to Motihari.  Nepal has been requesting the Indiangovernment to extend the pipeline to Kathmandu from Amlkehgunj. 

Leaders ofboth countries have hailed the project as 'another step towards strengthening'India-Nepal friendship.    

“Thepipeline will ensure continuous and uninterrupted supply of petroleum productsto Nepal, fulfilling its  energy requirements completely and will furtherboost bilateral relations between the two countries,” said Indian Minister forPetroleum and Natural Gas Dharmendra Pradhan in a tweet. 

Thecross-border pipeline project was first proposed by IOC in 1995. However, itsimplementation has moved at snail pace largely due to skepticism in Nepal overits smooth operation. The two countries did  ink an agreement  inAugust of 2015 to construct the pipeline.

Once it islaid, the pipeline is estimated to reduce  fuel transport cost by 40percent, something that is expected to greatly relieve  Nepali consumers.It is also expected to generate additional revenue for the government, reducetechnical loss, oil theft and road deterioration, besides making oil suppliescleaner and cheaper. The pipeline project is also expected to reduce the longqueues of trucks carrying petroleum products at the Birgunj border. Nearly1,500 trucks have been transporting petroleum products to Nepal. 

NOC has longargued that the pipeline will help end fuel shortages.

Source : MyRepublica, 8th April 2018

 

 

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