After constructing the Motihari-Amlekhgunj Petroleum Pipeline, while diesel is being imported from India through the pipeline, the government has prepared to enter into a G2G (Government-to-Government) agreement with India to construct two more petroleum pipeline projects.

The pipeline that has reached Amlekhgunj is going to be connected between Nepal and India for the construction of a petroleum pipeline from Lothar in Chitwan and Siliguri in India to Jhapa in eastern Nepal. The cost of these two projects is around Rs 27 billion.

The Government of India has already sent the preliminary draft for G2G. Radhika Aryal, joint secretary of the Ministry of Industry, Commerce and Supplies, said that the necessary suggestions about the draft have been sent to India through the Ministry of Foreign Affairs. She said, "The process of negotiating with India on the construction of petroleum pipelines has progressed. An agreement will be reached after finalizing the draft from both sides."

After the officials of the Indian Oil Corporation (IOC) and Nepal Oil Corporation (NOC) decided that the pipeline was suitable for operation, there was a discussion for the construction of the pipeline at the government level. The Nepal-India Joint Working Group (Joint Secretary level) on oil and gas cooperation meeting has also agreed in principle to build the pipelines.

After the pipeline built up to Amlekhgunj did not meet the demand for petroleum products sold in Nepal, the NOC has taken forward the Siliguri-Jhapa project as the second pipeline project. The modality of investment and construction will be decided in the G2G meeting.

Although the issue of building a petroleum pipeline between Nepal and India has been raised for a decade and a half, the Motihari-Amlekhgunj pipeline has been operational since September 10, 2019. The NOC has started the construction of a new pipeline project after seeing dozens of advantages of importing petroleum products through pipelines.

Umesh Prasad Thani, managing director of NOC, said that after the construction of the pipeline, it will help to maintain the purity of petroleum products coming to Nepal and control leakages. Petroleum products will be cheap, theft, leakage and adulteration will not be a problem. Similarly, the problem of traffic jams during the movement of oil tankers will be solved to some extent and environmental pollution will also be reduced, which will benefit both countries.

A petroleum pipeline project is going to be built from Siliguri in India to Jhapa in Nepal to cover the demand of Eastern Nepal and also Province 1. Even though the currently operational Motihari-Amlekhgunj petroleum pipeline cannot meet the demand of the country, the NOC has prepared to construct this pipeline project covering the eastern part.

According to the survey, the Siliguri-Jhapa 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.