Nepal, India sign agreement to develop petroleum infrastructure

KATHMANDU: Nepal and India have formalised a B2B Framework Agreement to advance the development of petroleum infrastructure in Nepal.

The agreement was signed today in Kathmandu by Chandika Prasad Bhatta, Executive Director of Nepal Oil Corporation (NOC), and Senthil Kumar, Director of Indian Oil Corporation (IOC). The signing ceremony was attended by Pankaj Jain, Secretary at the Indian Petroleum and Natural Gas Ministry, and V Satish Kumar, Chair of IOC.

The IOC described the agreement on its social media platform as a significant milestone in the energy partnership between India and Nepal.

Under the B2B Framework Agreement, a 50-kilometre petroleum pipeline will be constructed from Siliguri in India to Charaali in Jhapa, Nepal. Additionally, a Smart Greenfield Terminal with a capacity of 18,900 kilolitres will be established at Charaali.

The Government of India will provide a grant for a project to build a 62-kilometre petroleum pipeline from Amlekhgunj to Lothar in Chitwan. At Lothar, the NOC will construct a Smart Greenfield Terminal with a capacity of 91,900 kilolitres, with technical assistance from the Indian government. The total cost of these projects is estimated at Rs 15 billion.

The memorandum of understanding (MoU) for these initiatives was signed during former Prime Minister Pushpa Kamal Dahal's visit to India in May-June 2023.