Tendering starts for India-Nepal oil products pipeline

03 May 2017, Week 17 Issue 563

Indian Oil has started tendering procurement contracts to jumpstart the development of a 1.3 million tonne oil products pipeline to Nepal that could help safeguard the Himalayan country’s fuel supply.

NOC’s deputy managing director, Sushil Bhattarai, told the Himalayan Times on April 26 that IOC had launched an international tender in March to procure materials for a pipeline between the Indian border town of Raxaul and Amlekhgunj in Nepal.

He added that the winning bidders should be announced within one month.

“Once the pipe manufacturing process gathers pace, [Indian Oil] will eventually announce another tender for construction of the pipeline,” Bhattarai was quoted as saying.

The pipe is slated to pass via the Birgunj Customs point, the Birgunj Bypass, Gandak, Parwanipur, Jitpur, Simara and Pathlaiya before terminating at Amlekhgunj.

It will receive fuel from Indian Oil’s 7.5 million tpy (150,000 bpd) refinery in Haldia, West Bengal and its 6 million tpy (120,000 bpd) refinery in Barauni, Bihar.

The duct should cost 2.75 billion rupees (US$42.8 million) to deliver, of which Nepal must pay 750 million rupees (US$11.67 million). An extension is also believed to be under consideration for Chitwan in southern Nepal, though Kathmandu would have to fund the entire leg itself.

India first agreed to sell Nepal refined produce in 1974 and it is still the smaller country’s only fuel supplier.

Gasoline is trucked across the Himalayan border under a contract between the pair most recently renewed in March, which also provides Nepal with around 1.3 million tpy between 2017 and 2022, according to LiveMint.

The partnership became strained in 2015 when Indian Oil cancelled its tanker deliveries to Nepal altogether.

The fuel shortage that followed raised fears of a humanitarian crisis, as many Nepalese citizens no longer had access to fuel for cooking.

Nepal Oil Corp. (NOC) may hope the pipeline can prevent similar situations because it will bypass potential disruptions along the Nepalese border, where communities mounted blockades in 2015 to protest against Kathmandu’s constitutional agenda.

The project has stalled for years pending regulatory clearance from the Nepalese government, having already missed the original launch date of December 2016. Kathmandu appears to have been reluctant to allow unfettered access to sections of the Parsa Wildlife Reserve, where an engineering audit indicated almost 25,000 trees must be cleared for space to build a storage facility. Nepal’s Ministry of Forest and Soil Conservation (MoFSC) has since permitted NOC to conduct an environmental impact assessment (EIA) of woodlands in the reserve, according to the Himalayan Times.

Edited by

Andrew Kemp


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