Motihari-Amlekhguni oil pipeline to start commercial operation next month

KATHMANDU: India and Nepal have successfully concluded the 'testing transfer' of the Rs 325 crore Motihari-Amlekhguni oil pipeline and the strategically important project is set to start commercial operation next month, a media report said Friday. Along with reducing the huge transportation cost for the landlocked country, the commercial operation of the oil project will also ensure reduction in fuel prices, officials said.

The Motihari-Amlekhgunj oil pipeline project was first proposed in 1996. However, the project finally edged closer to reality during Prime Minister Narendra Modi's visit to Kathmandu in 2014.

The two governments had inked an agreement to execute the project in August 2015. However, project construction was delayed following the 2015 earthquake and supply obstruction along the southern border. The project construction works finally began in April last year with the mandate to complete it within 30 months.

The pipeline will help in tackling the oil storage problem in Nepal and doing away with transportation of petroleum products through tankers. Though the initial cost of the project was estimated to be Rs 275 crore, where the Indian government would inject Rs 200 crore, the Nepal Oil Corporation said that total project cost escalated to almost Rs 325 crore due to the delay.

The project will start commercial operation by August following the virtual inauguration of the Nepal-India bilateral project by executive heads of the two countries, The Himalayan Times reported.

As the project has been completed and is awaiting its formal inauguration, Nepal will officially start fuel trade with India via the pipeline after Prime Minister K P Sharma Oli and his Indian counterpart Modi formally launch operation of the project. Though the date for the official inauguration of the project is yet to be fixed, the Ministry of Foreign Affairs and Nepal Oil Corporation confirmed that groundwork is under way to virtually inaugurate the project by the two prime ministers.

According to the NOC, the two governments are working to ensure that inauguration of the project takes place in the first week of August. The report also quoted sources in the Ministry of Foreign Affairs as saying that there was also the possibility of the petroleum project being inaugurated by the heads of state of the two nations.

President Bidhya Devi Bhandari, during her recent visit to India, had invited her counterpart Ram Nath Kovind for an official visit to Nepal. Although the exact date has not been fixed, preparations are underway for Kovind's Nepal visit, the source said. "While the first option is more likely, the two governments are also exploring the possibility of the second option," said a source.

The virtual inauguration of the project will be done through video conferencing, where the two prime ministers will press a button in New Delhi and Amlekhgunj, resulting in opening of the valve of the petroleum pipeline, stated the NOC. The NOC and Indian Oil Corporation have successfully concluded the 'testing transfer' of the Motihari-Amlekhguni pipeline project.

"Commercial operation of the cross-border fuel project will bring down fuel price by at least one rupee per litre," said Sushil Bhattarai, deputy executive director at NOC.