Indian Oil Corporation Limited (IOCL) and Nepal Oil Corporation (NOC) have entered into a Business-to-Business (B2B) agreement to expand the Motihari-Amlekhgunj Petroleum Pipeline (MAPL) and establish new oil storage terminals in Nepal. This development follows a Government-to-Government (G2G) Memorandum of Understanding (MoU) signed in May 2023 between India’s Ministry of Petroleum and Natural Gas (MoP&NG) and Nepal’s Ministry of Industry, Commerce, and Supplies (MoICS).
Key Infrastructure Projects:
- Motihari-Amlekhgunj Petroleum Pipeline (MAPL):
- Commissioned in 2019, MAPL is South Asia’s first transnational petroleum product pipeline.
- The pipeline, initially running from Motihari (India) to Amlekhgunj (Nepal), will be extended to Chitwan, further enhancing its reach within Nepal.
- New Transnational Pipeline:
- A new pipeline is planned to connect IndianOil’s facility in Siliguri (India) to Jhapa (Nepal), along with the construction of an oil storage terminal at Jhapa.
Benefits of the Collaboration:
- Expansion of Petroleum Storage:
- Oil storage terminals will be constructed at Chitwan and Jhapa, ensuring ample fuel supply to meet Nepal’s future energy demands.
- Enhanced Energy Security:
- The projects aim to optimize the transportation of petroleum products, reducing reliance on tank trucks, which will cut transportation costs for NOC.
- The infrastructure will mitigate handling losses and environmental risks, while also addressing border congestion issues.
- It will improve Nepal’s energy security, particularly during natural disasters such as floods and landslides.
Strategic Importance:
- Economic Growth and Energy Availability:
- According to Pankaj Jain, the pipeline extension to Chitwan and the terminal at Jhapa are essential for Nepal, a country with challenging geographical terrain.
- Jain emphasized the importance of affordable and reliable fuel in driving GDP growth, noting that these pipelines will play a vital role in ensuring fuel availability.
- Strengthening Bilateral Energy Partnership:
- V Satish Kumar, Chairman and Director (Marketing) of Indian Oil, highlighted the significance of the India-Nepal energy partnership. He stated that the B2B agreement builds upon the success of the MAPL and will further bolster seamless energy connectivity, benefiting both nations.
Long-Term Impact:
This collaboration is set to transform the petroleum logistics landscape between India and Nepal, paving the way for efficient and secure energy transportation. The infrastructure developments will play a critical role in boosting Nepal’s energy resilience and supporting its economic development.