The Union Cabinet of India headed by the Prime Minister Narendra Modi gave its approval for the signing of a Memorandum of Understanding (MoU) between the India and Nepal
for the construction of a petroleum products pipeline from Raxaul (India) to Amlekhgunj (Nepal).
The MoU also includes re-engineering of Amlekhgunj Depot of Nepal and allied facilities. The MoU will promote bilateral cooperation in the oil and gas sector and secure long term supply of petroleum products to Nepal.
It will also help preserve the environment along the route and decongest the international border at Raxaul.
Highlights of the Project
- The Indian Oil Corporation (IOC) has been entrusted with the job of construction of the pipeline and re-engineering of the Amlekhgunj Depot and allied facilities, on behalf of Union Government.
- The project will comprise of two phases. In the first phase, a petroleum products pipeline from Raxaul in India to Amlekhgunj in Nepal would be constructed.
- The Indian Oil Corporation will bear a cost of 200 crore rupees for the first phase of the project.
- There will be a long term contract of 15 years (initial contract for five years extendable for two terms of five years each) between the Indian Oil Corporation and the Nepal Oil Corporation.
Background
Earlier in August 2014 during the visit of PM Narendra Modi to Nepal, the Government of Nepal had requested him for the construction of this petroleum products pipeline.
After that it was agreed by the Union Government.