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South-Asian cross-border pipeline first
India and Nepal have opened South Asia’s first cross-border pipeline amid a strengthening of bi-lateral relations that is expected to see landlocked Nepal’s refined oil product imports from India double over the next 18 months, reports David Hayes.
Jointly inaugurated on 11 September 2019 through a video conference link by India’s Prime Minister Narendra Modi and Nepal’s Prime Minister K P Sharma Oli, the 69 km pipeline runs from state-run Indian Oil Corporation’s Motihari terminal in north Bihar state to Nepal Oil Corporation’s Amlekhgunj depot in the Narayani zone of southern Nepal, about 50 km south of the capital, Kathmandu.
‘The Motihari-Amlekhgunj pipeline will provide cleaner petroleum products at affordable costs to the people of Nepal,’ Modi tweeted after the inauguration ceremony.
Designed to transport 2mn t/y of vehicle fuel to Nepal, the cross-border pipeline was built in 15 months at a cost of IDR3.24bn ($46mn).
In addition to preventing fuel theft and adulteration, both constant problems for the current cross-border road tanker transport system, the new pipeline is expected to enable Nepal to cut vehicle fuel prices by 2 Nepalese Rupees per litre due to cost savings compared with road haulage.
India and Nepal have had a fuel supply agreement since 1974. The idea of a cross-border pipeline was first mooted over two decades ago but had to wait until 2014 when Modi’s visit to Kathmandu produced a final agreement to build the project. Plans were later confirmed in 2017, when Indian Oil and Nepal Oil signed a new five-year oil supply agreement.
India currently supplies 1.3mn t/y of oil products to Nepal. This is expected to double by the end of 2020 following commissioning of the cross-border pipeline, which will transport gasoline and other fuels produced at Indian Oil’s Barauni refinery.
To transport the additional fuel volume to its Motihari oil terminal ready to dispatch to Nepal, Indian Oil is currently constructing a 30-inch diameter crude oil pipeline that will expand the capacity of the Haldia-Barauni section of its Paradip-Haldia-Barauni oil pipeline. The company is also converting the existing 18-inch twin pipeline in the Haldia-Barauni pipeline section, so that one pipeline will carry refined products while the second pipeline will transport gas.
