Indian Oil inks pact with Nepal Oil Corp to develop petroleum pipelines in Nepal

New Delhi: State-run Indian Oil Corporation (IOC) and Nepal Oil Corporation (NOC) have signed an agreement for the development of critical petroleum infrastructure projects in Nepal. “In a significant step toward enhancing bilateral cooperation and energy security, Indian Oil Corporation Limited (Indian Oil) and Nepal Oil Corporation (NOC) signed a Business to Business (B2B) Framework Agreement today in presence of Mr Pankaj Jain, Secretary, Ministry of Petroleum and Natural Gas (MoP&NG), Government of India (GoI) and Mr V Satish Kumar, Chairman & Director (Marketing), IndianOil, paving the way for the development of critical petroleum infrastructure projects in Nepal. The MoU was signed by Mr Senthil Kumar N, Director (Pipelines) holding additional charge of Director (Planning & Business Development), IndianOil and Dr Chandika Prasad Bhatta, Managing Director, NOC,” said an official statement issued by Indian Oil.

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Commenting on the development, Minister for Petroleum and Natural Gas Hardeep Singh Puri said in a post on X, “Another milestone in #IndiaNepalFriendship! Strengthening petroleum infrastructure, reducing costs, and bolstering supply security for Nepal citizens and the economy under the leadership of PM @narendramodi Ji and his vision of Vasudhaiva Kutumbakam.”

This agreement follows the Government-to-Government (G2G) Memorandum of Understanding (MoU) signed earlier between India’s Ministry of Petroleum and Natural Gas and Nepal’s Ministry of Industry, Commerce and Supplies (MoICS) on May 31, 2023. The G2G MoU was exchanged in the presence of the Prime Ministers of both the nations, symbolising the strength of the India-Nepal partnership.

‘Petroleum pipeline will ensure availability of affordable, reliable fuel for Nepal’

Speaking on the occasion, Jain said, “The existing pipeline from Motihari to Amlekhgunj being extended to Chitwan takes care of one part of Nepal, and the upcoming terminal at Jhapa is equally important given the challenges of Nepal being a hill state.” He remarked, “The GDP growth, for any country, will depend on the availability of affordable and reliable fuel. These pipelines will actually be ensuring that.” The length of the Siliguri to Jhapa (in Nepal) pipeline will be 50 km, while another pipeline from Amlekhgunj to Lothar of Chitwan will be 62-km-long.

V Satish Kumar, Chairman and Director (Marketing), Indian Oil, stated, “We are proud to strengthen the India-Nepal energy partnership through this B2B framework between Indian Oil and Nepal Oil Corporation. This collaboration builds upon the success of the Motihari-Amlekhgunj pipeline and paves the way for seamless energy connectivity, enhancing energy security for both nations. Indian Oil remains committed to timely execution of these projects and fostering a stronger bilateral relationship.”

The agreement encompasses the extension of the existing Motihari-Amlekhgunj Petroleum Pipeline (MAPL) — South Asia’s first transnational petroleum product pipeline, commissioned in 2019 — until Chitwan, Nepal, adding 62 km to its length. In addition, a new transnational petroleum pipeline will be built from Indian Oil’s facility in Siliguri to Jhapa in Nepal. The pact also covers the construction of oil storage terminals at Chitwan and Jhapa.

“These projects are expected to transform petroleum logistics between the two countries. These pipelines have been designed to meet the future energy needs of Nepal, with ample storage capacity at both the Chitwan and Jhapa terminals,” said the statement.

The construction of these pipelines and the storage terminals was already covered under the G2G MoU signed in 2023. India, which is targeting to increase its refining capacity from the present 254 Million Metric Tonnes per Annum (MTPA) to 450 MTPA by 2030, is looking to ramp up its export of refined petroleum products to other countries.

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