Nepal-India Prime Ministers KP Sharma Oli and Narendra Modi will virtually inaugurate the 69 km Motihari-Amalekhunj Petroleum Pipeline today.
The two Ministers will switch on the pipeline through remote control from their respective offices in Kathmandu and New Delhi.
The said project is of utmost importance to Nepal as it will significantly bring down fuel transportation costs for the country, which imports fuel from India.
The pipeline will bring fuel from the Baurani refinery in Bihar’s Begusarai district to Nepal’s Amalekhunj. The Amalekhunj fuel depot has a storage capacity of 16,000 kls of petroleum products.
Earlier this year, Indian Ambassador to Nepal Manjeev Singh Puri had termed the petroleum pipeline project as ‘a game changer for Nepal’.
“The Motihari-Amalekhgunj pipeline will help in tackling the oil storage problem in Nepal and doing away with transportation of petroleum products through tankers. It will ensure smooth, cost-effective and environment-friendly supply of petroleum products to Nepal,” said Puri.
The initial cost for the project was estimated at NPR 275 crore, of which India said it would bear NPR 200 crore.
However, the Nepal Oil Corporation (NoC) said that the cost for the project scaled up to around NPR 325 crore.
“Commercial operation of the cross-border fuel project will bring down fuel price by at least one rupee per litre,” said Sushil Bhattarai, NOC Deputy Executive Director.
The NoC and the Indian Oil Corporation (IoC) successfully completed the Motihari-Amalekhunj pipeline project test in August 2019. During the test, the IoC supplied 3,100 kls of diesel through the pipeline to test the newly-constructed tanks at Amalekhunj.
According to the NoC Deputy Executive Director, the pipeline is able to supply 394 kls of petroleum per hour.
“In the initial phase we plan to receive only diesel, which is about the 70 per cent of total petroleum product imports, through the pipeline,” said Bhattarai.
Once the pipeline is inaugurated, Nepal will import 3,000 kls of diesel per day.
“After the commercial operation of the project starts, it will bring down fuel price by at least one rupee per litre in the domestic market,” added Bhattarai.
The Motihari-Amalekhunj pipeline project was first proposed in 1996. However, the project was put on hold until Indian PM Narendra Modi’s visit to Nepal in 2014. The two nations PMs had then signed an agreement to commence project works in 2015. However, the project was further delayed following the 2015 Gorkha earthquake and India’s economic blockade.