Petroleum Pipeline to be Built with an Investment of INR 17 Billion
05.31.2023 By News - NEWS

May 31, 2023 [My Republica]- India is said to spend more than INR 17 billion to build two petroleum pipeline projects and a storage facility. The construction of a petroleum pipeline from Siliguri in India to Jhapa and from Amlekhganj in Bara to Lothar in Chitwan to supply petroleum products to Nepal, will help to build a greenfield terminal (storage site) in Jhapa.


The issue of petroleum pipeline construction has been discussed between Nepal Oil Corporation and Indian Oil Corporation (IOC) for a long time. Prime Minister Dahal is going on a visit to India on May 31. Minister for Industry, Commerce and Supplies Ramesh Rijal said that an agreement will be reached during the Prime Minister’s visit to India to build two pipelines and a terminal in Jhapa with subsidies. “The Government of India has agreed to build a petroleum pipeline under a grant,” Minister Rijal said, “An agreement will be reached during the PM’s upcoming visit to India.” Minister Rijal will also participate in the Prime Minister’s visit to India.

The corporation planned to construct Siliguri-Jhapa, Amlekhganj-Lothar petroleum pipeline, greenfield terminals at Lothar in Jhapa and in Chitwan. Out of these four projects, Siliguri-Jhapa Pipeline, Amlekhganj-Lothar Petroleum Pipeline, Terminal at Jhapa will be built by India under grants. All these projects will be built by IOC owned by the Government of India. The terminal at Chitwan will also be constructed by India. But the corporation is going to bear the cost of its construction. Minister Rijal said that a decision has been taken by the Council of Ministers regarding the joint venture with India to build pipelines and terminals.

According to the report jointly prepared by Nepal Oil Corporation and IOC in 2021, the total cost of these four projects is Rs 26.93 billion. As this is an estimated cost of 2021, the actual cost is expected to increase with the price increase. The construction cost of the 62 km long pipeline from Amlekhganj to Lothar is INR 274 crores. The cost of construction of the greenfield terminal in Chitwan is INR 618 crores. The cost of construction of this terminal will be borne by the Corporation. Similarly, the cost of the 50 km long Siliguri-Jhapa pipeline is INR 288 crores and the construction cost of the Jhapa terminal is INR 502 crores.

These projects were jointly studied by the IOC and the NOC. The capacity of the fuel storage terminal at Jhapa will be 42,000 kiloliters and the capacity of the Lothar terminal will be 103,150 kiloliters.

After IOC constructed the Motihari-Amlekhganj petroleum pipeline with the investment of the corporation, now diesel is being imported from India through the pipeline. The IOC and corporation officials have decided to construct two pipelines after studying the projects. The study was conducted after the decision of the Joint Working Group (Joint Secretary level) meeting on Nepal-India Petroleum and Natural Gas.

Although the issue of building a petroleum pipeline between Nepal and India has been raised for a decade and a half, the Motihari-Amlekhganj pipeline was put into operation on September 10, 2019. After seeing dozens of advantages of importing petroleum products through pipelines, the corporation has started the construction of a new pipeline project. The executive director of the corporation, Umesh Kumar Thani, said that the pipeline project has been started for easy supply of petroleum products. “The pipeline project is necessary for the country and is going to be done,” said Thani, “Fuel supply will be easy after the construction of the pipelines,”he added.

It is believed that the construction of the pipelines will help save transportation costs, maintain the purity of petroleum products coming to Nepal and control leakages. By bringing petroleum products through pipelines, there is no problem of theft, leakage and adulteration. The problem of traffic jams during the movement of oil tankers will also be solved and environmental pollution will also decrease.

The Siliguri-Jhapa pipeline will cover the demand of Eastern Nepal and also Province 1. As the currently operational Motihari-Amlekhganj petroleum pipeline cannot meet the demand of the entire country, the corporation is going to construct a pipeline to cover the eastern part. About 35 km of the Siliguri-Jhapa pipeline will be in India and 15 km in Nepal. Even now, the corporation is transporting the petroleum products required for Province 1 from Barauni and Siliguri in India. After building the pipeline, fuel will become cheaper.

India has already provided supply to many of its territories by building pipelines. NOC officials say that since the pipeline has been connected to Siliguri, it is easy to extend it to Jhapa. The Corporation has also purchased land in Jhapa to build a fuel storage site. The petroleum pipeline brought to Amlekhganj is going to be extended to Chitwan. The country’s capital, Kathmandu, and another major city, Pokhara, consume a high amount of petroleum products. Therefore, to reduce the cost of transportation in these areas, a petroleum pipeline is going to be constructed up to Lothar in Chitwan. After bringing the pipeline from Amlekhganj to Chitwan, it will be easier to sell and manage petroleum products in the country in the long run. The corporation has also purchased land to build a storage site in Chitwan.

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