Kathmandu: Nepal Oil Corporation (NOC) has estimated that building the 69 km Amlekhgunj-Lothar petroleum pipeline is going to cost Rs 13 billion.

A feasibility study conducted by the NOC has estimated the aforementioned cost that will be needed to extend the existing Amlekhgunj-Motihari petroleum pipeline to Lothar of Chitwan district. According to NOC, the technical study report has been submitted to the Ministry of Industry, Commerce and Supplies.

Following an understanding between the governments of Nepal and India, a joint taskforce of NOC and Indian Oil Corporation has been working to develop the detailed project report (DPR) of the project. The proposed site in Lothar is planned to have a storage capacity of 100,000 kilolitres of petroleum.

The existing cross-border pipeline from Motihari of India to the Amlekhgunj depot of NOC is being used to transport diesel. The state-owned oil monopoly has been planning to transport petrol also by using this infrastructure.

According to NOC, the infrastructure helped it save around Rs 1.5 billion in the last fiscal year. Apart from reducing the transportation cost, the pipeline is also expected to check the technical loss of petroleum products, leakages and petroleum theft during transportation and maintain quality.