KATHMANDU, NOV 08 – Nepal Oil Corporation (NOC) and Indian Oil Corporation (IOC) have agreed in principal to use the Amlekhgunj-Pathlaiya highway—the shortest route—to lay the proposed cross-border petroleum pipeline.
In bilateral talks that formally began here on Friday, the two sides agreed to use the 41km route among three alternatives proposed by a recent survey.
NOC Managing Director Chandika Prasad Bhatta said they have agreed to use the shortest route, but it will be officially confirmed only after Saturday’s final meeting endorses the decision.
A high-level delegation from India’s Oil Ministry and IOC is on a two-day visit to Nepal to finalise the technical and financial aspects of the pipeline. The team is led by Rajive Kumar, additional secretary of India’s Ministry of Petroleum and Natural Gas. However, India’s petroleum ministry’s team was not involved in Friday’s meeting.
According to NOC, Saturday’s meet will include representatives from ministries of both the countries to finalise the draft of a Memorandum of Understanding to be signed during Indian’s Prime Minister Narendra Modi’s Nepal visit in late November.
The Amlekhgunj-Pathlaiya road-to-road alignment option includes laying down the pipeline along the 26-km Amlekhgunj-Patliya Road, and 12-km forest areas.
The second option included laying the pipeline on the 12-km forest fire-line and 25-km agricultural land opposite Simara Airport. Similarly, the third one included passing the pipeline through the 17-km railway track in forest areas, 20-km agricultural land and 3-km road.
The estimated project cost is around Rs 9 billion. Of the total cost, pipeline construction and land acquisition costs are estimated at Rs 4 billion. Rest of the funds will be used for other work, including capacity upgradation of NOC’s Amlekhgunj depot, its automation, and construction of a pumping station.
The Indian team will discuss financial modality of the pipeline on Saturday. Although the Indian government had pledged to develop the project in grant, need for reviewing the financial modality was felt after Finance Minister Ram Sharan Mahat said Nepal should also inject some money in the project. The joint team is also likely to discuss whether the Nepali private sector companies would be given access to products supplied through the pipeline.
The pipeline is expected to reduce transportation costs by 40-50 percent, control leakage and ensure hassle-free transfer and quality of petroleum products.
Source : eKantipur