Updated on 11 September, 2019
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
About the Pipeline
- 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
- 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
- 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.
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- 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.