An agreement has been reached between Nepal and India for the construction of two important pipelines in the ongoing India visit of Prime Minister Pushpa Kamal Dahal.

India would provide around Rs 17 billion for the same. Two petroleum pipeline projects would be constructed while Nepal has to construct a storage facility at its own investment.

The government of Nepal has put the construction of a petroleum pipeline in top priority in order to reduce the huge chunk of money the country has been spending in supply of petroleum products.

Two petroleum pipelines-- from Siliguri of India to Jhapa, Nepal; and from Amalekhgunj of Bara to Lothar of Chitwan would be constructed for easy and smooth supply of petroleum products. Similarly, a storage facility would be constructed in Jhapa.

Although Nepal Oil Corporation and Indian Oil Corporation had been holding discussions for the construction of the pipelines for long, no agreement was reached in this regard.

An agreement has been reached at the government-level to forward these projects in the course of the India visit of Prime Minister Dahal now.

According to Executive Director of Nepal Oil Corporation, Umesh Prasad Thani, two pipelines and a terminal of Jhapa would be constructed by India at grants. The NOC had been saying that Siliguri-Jhapa, Amlekhgunj-Lothar petroleum pipelines and storage facilities in Jhapa and Chitwan would be constructed and study for the same had already been conducted.

It is believed that the construction of projects would be accelerated after today's agreement. The total cost of these four projects is equal to Rs 17 billion as per the report jointly prepared by NOC and IOC in 2021. However, the cost may increase slightly due to price hikes at international level.

According to NOC, the distance of Amlekhgunj-Lothar pipeline is 62 kilometers while Siliguri-Jhapa pipeline is 50 kilometers. The capacity of Jhapa storage facility would be 42,000 kilolitres and of Lothar terminal 103,150 kilolitres.