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Pradhan to sign MoU for oil pipeline with Nepal

Oil Minister Dharmendra Pradhan is visiting Kathmandu this week for signing of an agreement to lay an oil pipeline from Raxaul in Bihar to Amlekhgunj in Nepal to supply petrol, diesel and ATF to the land-locked Himalayan Kingdom.

August 23, 2015 / 04:13 PM IST
Oil Minister Dharmendra Pradhan is visiting Kathmandu this week for signing of an agreement to lay an oil pipeline from Raxaul in Bihar to Amlekhgunj in Nepal to supply petrol, diesel and ATF to the land-locked Himalayan Kingdom. "Pradhan is visiting Kathmandu, Nepal on August 23-25, 2015," an official statement said here. During the official visit he will sign the MoU between Government of India and Government of Nepal for the construction of petroleum products pipeline from Raxaul (India) to Amlekhgunj ( Nepal), it said.

Nepal depends on India for meeting all of its fuel requirements. Petrol, diesel, domestic LPG and jet fuel (ATF) are currently trucked from Indian Oil Corp's (IOC) depot at Raxaul to Nepal. In 2006, a 41-km pipeline from Raxaul to Amlekhgunj in Nepal was proposed for transportation of the fuel.

The pipeline was to be funded 50:50 by IOC and Nepal Oil Corp (NOC). The project, however, never took off as Nepal refused to fund its share of cost. IOC has now agreed to foot the Rs 200 crore cost in exchange for Nepal committing to buy products for at least 15 years.

Of 41-km 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 in India to Amlekhgunj in Nepal would be constructed.

IOC will bear a cost of Rs 200 crore for the first phase of the project. There will be a long-term contract of 15 years -- initial contract for five years extendable for two terms of five years each.
first published: Aug 23, 2015 04:13 pm

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