About Motihari-Amlekhgunj pipeline

About Motihari-Amlekhgunj pipeline

Updated on 11 September, 2019

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about-motihari-amlekhgunj-pipeline

In News Prime Minister Narendra Modi and his Nepalese counterpart K P Sharma Oli jointly inaugurated through video-conference the 69km pipeline from state-run Indian Oil’s terminal in Motihari in north Bihar to Nepal Oil Corporation’s Amlekhgunj depot in Narayani Zone of southern Nepal. Background

  • The Motihari-Amlekhgunj pipeline project was first proposed in 1996.
  • The project got pace after Prime Minister Narendra Modi visited Kathmandu in 2014.
  • The following year, the two governments signed an agreement to execute the project; however, political tensions, including India’s alleged “economic blockade” of Nepal, acted as roadblocks in the implementation.
  • In 2017, state-owned Indian Oil Corporation (IOC) signed a petroleum trade agreement to supply about 1.3 million tonnes of fuel annually to Nepal with a promise to double the volume by 2020.
  • In July, the two countries successfully concluded a “testing transfer” through the oil pipeline
About the Pipeline
  • The pipeline will transport fuel from Barauni refinery in Bihar
  • The Amalekhgunj fuel depot will have the capacity to store up to 16,000 kilolitres of petroleum products
  • Total project cost had escalated to almost Rs 325 crore from the planned 275 crore
Significance
  • This will be South Asia’s first cross-border oil product pipeline.
  • Due to reduced transportation cost, it will help Kathmandu to cut fuel prices by Rs 2 per litre
  • It will also help in arresting pilferage and adulteration.
  • Despite providing uninterrupted supply during any blockade it will also help in tackling the oil storage problem in Nepal.
For India,
  • Gives Indian oil a bona fide customer.
  • Motihari-Amlekhgunj pipeline further helps to deepen engagement with Nepal.
  • India currently supplies 1.3 million tonnes per annum of Petro products to Nepal, this will further boost trade.
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