Nepal Oil Corporation (NOC) is going to build a fuel storage tank of 8.7 million liters (8,700 kiloliters) in Amlekhgunj. The corporation is going to build infrastructure including fuel storage with an investment of around Rs 3.15 billion.

The NOC, which is importing diesel through pipes by constructing the Motihari-Amlekhgunj Petroleum Pipeline project, has started preparations to build more infrastructures under the second phase of the project for importing petrol through pipeline.

After a meeting between the NOC and Indian Oil Corporation (IOC) officials in India on Friday and Saturday, it has been agreed to proceed with the second phase of the project from September. The meeting was led by Deputy Managing Director Sushil Bhattarai on behalf of NOC and Pipeline Director DS Nanaware on behalf of IOC.

Pradip Yadav, regional head of NOC, Madhesh province, Amlekhgunj, said that IOC officials have started the process to build the infrastructure under the second phase of the project. "It has been agreed that the construction of the second phase project will start from the last week of September or the first week of October," Yadav said. “Now the construction work of infrastructure will proceed.”

Although diesel is being imported through the pipeline, petrol has not been imported due to the lack of storage tanks. Under the second phase of the project, there is a plan to build two fuel storage tanks of 4,100 kiloliters capacity each, two intermix tanks of 250 liters capacity.

Similarly, the corporation said that two water tanks for fire fighting, 24 automatic loading centers for loading petrol and diesel and a modern laboratory will also be constructed.

The total cost of the second phase project is about Rs 3.33 billion, of which, the NOC will invest INR 1.285 billion and IOC will invest INR 800 million.

Some steel panels have been brought to Amlekhgunj for making vertical tanks. The IOC is in the process of issuing a tender and evaluating the construction works. The second phase of the project is expected to be completed by January 2024. It is said that after the completion of the construction of the project, the import of diesel and petrol through pipes will start, and the corporation will save about Rs 150 million per month which it is spending on the transportation of fuel.

The NOC started importing diesel through pipeline from September 10, 2019. The project was built at a cost of Rs 4.4 billion. Of which, India had given a subsidy of Rs 3.20 billion and Rs 1.20 billion had been invested by the NOC. The project was developed by IOC. About 250 kiloliters of diesel per hour is being imported through the pipeline. After the diesel is brought through the pipe, it is placed in a vertical tank. After checking the density, temperature, quality, it is loaded on the tankers and sent to other depots.

Diesel brought from Motihari through the pipeline is stored at the Amlekhgunj depot and sent to depots including Kathmandu, Pokhara, Bhairahawa, Janakpur etc. According to the NOC, the amount to be paid to the tanker operators due to technical losses has dropped to zero after starting to import diesel through pipes.

In addition to saving transportation costs, pollution has been reduced, quantity and quality have also been ensured. Similarly, technical losses have been reduced and leakage during transportation has been stopped and it has become easier for the corporation to supply and sell petroleum products according to market needs and consumer demand. After starting the construction of fuel storage infrastructure, the import of petrol through pipelines will also start.

The problem of high cost of transportation by tankers, environmental pollution, traffic jams, and deterioration of roads and lack of petroleum products in the market following general disruptions in transportation has been eliminated.

After the success of the Motihari-Amlekhgunj pipeline, the NOC is preparing to extend it to Chitwan. The NOC and IOC technicians have studied and prepared the modality to extend the pipeline to Chitwan. The petroleum pipeline from Amlekhgunj to Chitwan will be around 62 kilometers. After the successful completion of the pipeline project, the NOC has started the second cross-border oil pipeline construction process with India, targeting eastern Nepal.

Preparations are underway between the two countries for the expansion of the petroleum pipeline from Siliguri, India to Jhapa in Nepal. According to the survey, this pipeline will be about 50 kilometers long. Of the total length of the pipeline, about 35 kilometers is on the Indian territory and 15 kilometers on the Nepali territory. Preliminary estimates indicate that the initial cost of constructing the pipeline project will be around Rs 80 million per kilometer.