Nepal wants the petroleum product pipeline proposed by Prime Minister Narendra Modi as a ‘gift’ from India. However, the Himalayan nation is not willing to offer a 25-year exclusive contract to Indian Oil (IOC), which will lay the 41-km pipeline between the neighbours.
“Nepal considers the entire project as a ‘gift’ from India and does not want to use the line of credit available to it for this project. They also do not want to give IOC the exclusive right for supply of petroleum products through this pipeline and do not want to tie themselves down to a 25-year agreement,” a senior government official told FE.
The proposal is to construct a product pipeline from Raxaul (Bihar) in India to Amlekhganj in Nepal. This pipeline would eliminate the need for transportation of petrol and other petroleum products across the border via tankers. Of 41-km pipeline, about 39 km would lie in Nepal. At the same time, the Raxual depot would have to be upgraded and linked to the Barauni refinery through Motihari depot.
According to the proposal mooted by India, the estimated cost of laying the pipeline would be around R150 crore, which IOC will bear. But, the PSU firm in return would seek a long-term agreement for 25 years with Nepal Oil Corporation (NOC) to operate the pipeline.
Moreover, a survey undertaken by IOC and NOC has established the pipeline may be laid along the National Highway corridor, thereby, obviating the need for land acquisition.
The cost of a new automated terminal at Amlekhganj would cost close to R300 crore. However, by retrofitting the existing facilities it can be brought down by half to R100-150 crore. For this, the government of Nepal may seek a line of credit from the ministry of external affairs (MEA), said the official.
To deepen economic ties with Nepal, Prime Minister Modi during his visit to the country in August had put forward the proposal to lay a pipeline to supply petrol, diesel and ATF. Following Modi’s visit, Nepal’s minister for commerce and supplies Sunil Bahadur Thapa also called on minister of state (independent charge) for petroleum and natural gas Dharmendra Pradhan in October to discuss the modalities of the implementation of this project.