VINIT WAHI

India and Nepal have reached the B2B Framework Agreement regarding the development of petroleum infrastructure in Nepal. Recently,  Indian Oil Corporation Limited and Nepal Oil Corporation (NOC) inked a Business to Business (B2B) Framework Agreement in New Delhi in which the Executive Director of Nepal Oil Corporation, Dr Chandika Prasad Bhatta and Director of Indian Oil Corporation Limited, Senthil Kumar, signed the Agreement in presence of Pankaj Jain, Secretary, Ministry of Petroleum and Natural Gas (MoP&NG), Government of India and V. Satish Kumar, Chairman, Indian Oil.

This agreement follows the Government-to-Government Memorandum of Understanding signed earlier between India’s MoP&NG and Nepal’s Ministry of Industry, Commerce and Supplies on May 31, 2023. The G2G MoU was exchanged in the presence of the Prime Ministers of both nations, symbolizing the strength of the India-Nepal partnership. 

This Agreement is supposed to be a key milestone in the India-Nepal energy partnership. By Implementation of these projects, transportation of petroleum products will be convenient from India to land-linked Nepal, which will significantly reduce costs for Nepal Oil Corporation by minimizing reliance on tank trucks. The infrastructure will mitigate handling losses & environmental risks, prevent road congestion resulting during tank truck movement and support Nepal’s energy security during natural disasters such as floods and landslides.

As per the B2B Framework Agreement, a 50-kilometre petroleum pipeline from Siliguri of India to Charali of Jhapa will be built. Similarly, a Smart Greenfield Terminal will be constructed at Charali. The government of India will provide a grant for the implementation of a project to build a 62-kilometre petroleum pipeline from Amlekhgunj to Lothar of Chitwan. Likewise, at Lothar, a Smart Greenfield Terminal with 91,900 kiloliters capacity will be built by the NOC with the technical assistance of the Indian government. The total cost of these projects is worth Rs 15 billion.