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Nepal Oil Corporation (NOC) has begun construction of a modern fuel depot in Lothar, Chitwan, at an estimated cost of nearly Rs 10 billion, aiming to strengthen the country’s fuel storage and distribution system.

The project includes the extension of the Amlekhganj petroleum pipeline to Lothar and the construction of a large-scale storage facility.

According to project chief Pradeep Yadav, work has started on a petroleum storage depot with a capacity of 91,900 kiloliters in Rapti Municipality. NOC has awarded a Rs 795.4 million contract for land filling and construction of a compound wall to a joint venture of Motidan Construction Sewa and D.S. Construction through a competitive bidding process.

The contractor has been given 12 months to complete site preparation. Once completed, the site will be handed over to Indian Oil Corporation (IOC), which has already prepared the Detailed Project Report (DPR) and initiated the global tendering process.

Spread across 23 bigha and 12 katha of land, the depot will feature storage facilities for petrol, diesel, kerosene and aviation fuel. The greenfield terminal is estimated to cost around Rs 9.8 billion.

The facility will have storage capacity for 33,000 kiloliters of petrol, 46,500 kiloliters of diesel, 1,600 kiloliters of kerosene and 10,800 kiloliters of aviation fuel. It will include three petrol tanks, three diesel tanks, two kerosene tanks and three aviation fuel tanks. A 17,400-kiloliter water reservoir will also be built as part of the fire safety system.

In addition, two transmix tanks with a combined capacity of 500 kiloliters and four underground reserve tanks for different petroleum products will be constructed.

A modern truck loading facility (TLF) will support fuel sales and distribution. Upon completion, the depot is expected to become Nepal’s largest fuel storage facility, significantly enhancing the country’s fuel security and storage capacity.

The project is being developed under agreements between the governments of Nepal and India. NOC officials say the facility will improve fuel supply management in Kathmandu Valley, Pokhara and surrounding regions, which account for a large share of the country’s fuel consumption.

As part of the project, the existing Motihari-Amlekhganj pipeline will be extended to Lothar. IOC will bear the estimated Rs 4.29 billion cost of the pipeline extension as a grant, while NOC will finance the storage infrastructure.

Site preparation work, including land leveling, soil filling, canal relocation and construction of 11-foot-high security walls, is already underway.

The 10.65-inch-diameter Amlekhganj-Lothar pipeline will be capable of transporting petroleum products at a rate of 273 kiloliters per hour and around two million tons annually. NOC expects the pipeline to reduce dependence on fuel tankers, lower transportation costs and minimize leakage, theft and contamination during transit.

Alongside the Chitwan project, India is also supporting the construction of the Siliguri-Jhapa petroleum pipeline and the Jhapa Greenfield Terminal. Following recent agreements between NOC and IOC, both projects have entered the implementation phase.

By Dilip Paudel