Nepal Oil Corporation (NOC) has officially launched the construction phase of its second petroleum pipeline project, connecting Amlekhgunj in Bara to Lothar in Chitwan. The initiative was formally inaugurated last Friday with the commencement of physical infrastructure development near the Rapti River in Lothar.

Project Chief Pradeep Yadav opened a dedicated pipeline office at the site, marking the beginning of construction activities. The pipeline, spanning 62 kilometers, will be laid from NOC’s existing facilities in Amlekhgunj to Lothar, where a large-scale greenfield terminal and fuel storage complex will be established with a total storage capacity of 91,900 kiloliters.

NOC had acquired 23 bighas, 12 kaththas, and 3 dhurs of land in 2016 for approximately Rs 710 million in Rapti Municipality Ward No. 1, adjacent to the riverbank. This site is now being utilized for the terminal’s development.

According to NOC, Indian Oil Corporation (IOC) has already completed the Detailed Project Report (DPR) for the entire project. As per the DPR, the pipeline will have a diameter of 10.75 inches, be capable of withstanding pressure up to 173.5 kg/cm2, and transport petroleum products at a flow rate of 273 kiloliters per hour.

The total estimated cost for constructing the pipeline, storage facilities, and greenfield terminal is INR 8.81 billion (approximately Rs 14.09 billion). The DPR also specifies the construction of a pipeline station covering an area of 160 square meters in Lothar.

Yadav emphasized that the project will significantly reduce the domestic transportation cost of petrol, diesel, kerosene, and aviation fuel, which is currently being carried out via tanker trucks. Moreover, the pipeline will help mitigate risks of fuel theft and pilferage. The project is targeted for completion within three years.

The entire construction is expected to be completed within 54 months as per the terms of a Business-to-Business (B2B) agreement between NOC and IOC.

A formal agreement to construct two cross-border pipelines - from Siliguri to Charali in Jhapa, and from Amlekhgunj to Lothar - was signed on 3rd October 2024 , in New Delhi by NOC Executive Director Dr. Chandika Bhatt and IOC Director Senthil Kumar.

Earlier, during Prime Minister Pushpa Kamal Dahal’s visit to India, a Government-to-Government (G2G) agreement was signed on 1st June 2023, in the presence of Indian Prime Minister Narendra Modi. During the event, then Minister for Industry, Commerce and Supplies Ramesh Rijal and India’s Petroleum Minister Hardeep Singh Puri signed the MoU.

Project cost breakdown

Under the B2B agreement, the cost of laying the Amlekhgunj–Lothar pipeline, which amounts to INR 2.68 billion (Rs 4.28 billion), will be covered by IOC. Meanwhile, NOC will bear the cost of constructing the greenfield terminal and storage facility, which is estimated at INR 6.13 billion (Rs 9.8 billion), with India providing technical assistance.

Storage facility details

The pipeline will extend from the existing Motihari–Amlekhgunj pipeline station to Lothar. At the Lothar site, a large petroleum storage facility with a total capacity of 91,900 kiloliters will be constructed. It will include three tanks of 11,000 kiloliters each, totaling 33,000 kiloliters capacity for petrol storage; three tanks of 15,500 kiloliters each, totaling 46,500 kiloliters for diesel storage; two tanks of 800 kiloliters each, totaling 1,600 kiloliters for kerosene storage; and three tanks of 3,600 kiloliters each, totaling 10,800 kiloliters for aviation fuel storage.

Additionally, two transmix tanks of 250 kiloliters each will be built, offering a combined capacity of 500 kiloliters. Four underground tanks will also be constructed - each with a 50-kiloliter capacity, one each for petrol, diesel, kerosene, and aviation fuel - totaling 200 kiloliters.