Nepal and India will sign an agreement on Thursday regarding the expansion of petroleum pipelines and the construction of modern storage depots. Officials of Nepal Oil Corporation informed that an agreement will be reached on Thursday regarding the extension of the petroleum pipeline from Motihari to Amlekhganj to Lothar in Chitwan (69 kilometers) and the construction of a storage house with a capacity of more than 40,000 kiloliters in Jhapa.

A team led by the Executive Director of Nepal Oil Corporation Dr Chandika Prasad Bhatt reached New Delhi on Wednesday to sign the agreement. The Nepali delegation also includes three deputy executive directors - Nagendra Sah, Birendra Goit and Deepak Baral along with directors Purna Rijal, Bineet Mani Upadhyay, Pushkar Karki and manager Masini Khadka have gone to Delhi. A few days ago, Indian Oil Corporation had invited the NOC team to Delhi through an email for the contract today, October 3.

NOC Director Purna Rijal informed New Business Age that the pipeline currently from Motihari to Amlekhganj in India will be extended by 69 kilometers to Lothar in Chitwan. A new petroleum pipeline will also be built from Siliguri to Charali in Jhapa, and a storage house with a capacity of more than 40,000 kiloliters will be set up in Jhapa. The depot will be built on the NOC’s land.

According to Rijal, the modern petroleum storage depot and pipeline expansion that will be built after the agreement between the two countries will make facilitate Nepal in petroleum imports. Earlier, a study conducted in 2020 estimated the cost of these three projects at Rs 17.1 billion. Out of this, the cost of Amlekhganj-Lothar pipeline was estimated at Rs 4.38 billion, Siliguri-Jhapa pipeline at Rs 4.60 billion and Jhapa warehouse at Rs 8.3 billion.

The two countries reached an understanding to build these facilities during the then Prime Minister Pushpa Kamal Dahal's visit to India on June 1, 2023. Dahal’s Indian counterpart Narendra Modi had agreed that Nepal would not bear any cost. Now a Memorandum of Understanding is about to be signed to implement the same agreement. As per the proposal, all three projects should be completed within 51 months after signing the agreement.