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‘We will now need to enhance the fuel storage capacity in Amlekhgunj’

   July 26, 2019        355        Sujan Dhungana

The much-hyped Motihari-Amlekhgunj pipeline project, which was proposed back in 1996, is set to become a reality within the next few weeks, as all physical works of the project have been completed and the project is just awaiting a formal commencement. The project, which has been completed much before the set deadline, has not only set a benchmark among different other projects which are under way, but will also prove instrumental in ensuring smooth supply of fuel into the country. Sujan Dhungana caught up with Sushil Bhattarai, deputy executive director of Nepal Oil Corporation, and Akshyay Kumar Singh, director (Pipelines) of Indian Oil Corporation, to know details of the project, its commencement and impact. Excerpts:

Shushil Bhattrai

What is the current position of the oil pipeline project?

The project is ready for commercial operation. All the physical works related to pipe laying and other related works regarding testing and experiments have been completed. Now NOC and IOC are preparing for the final commencement of the project. At present, the two agencies and other stakeholders are conducting the final inspection of the project. Moreover, the ‘test transfer’ of the project has already been concluded with the supply of diesel from IOC refineries to NOC’s depots at Amlekhgunj through the pipeline.

Among various Nepal-India bilateral projects, the Motihari-Amlekhgunj project proved to be an ideal one as it was completed much ahead of schedule. What’s the story behind this success?

NOC and IOC had been discussing about the pipeline project since many years and we had even inked a memorandum of understanding (MoU) for this project in 2004. I myself was involved in preparing the draft of the MoU signed at the time. The agenda regarding this pipeline project had also been discussed during different NOC-IOC meetings before 2004. During that time, the monthly demand for diesel in Nepal was approximately 35,000 kilolitres, while the monthly demand for petrol was around 7,000 kilolitres. However, now NOC has been importing up to 180,000 kl of diesel per month whereas the monthly demand for petrol stands at around 50,000 kl. What I mean to say is that NOC had seen the viability of the petroleum pipeline project even during the early 2000s, when the demand for petrol and diesel was way less than what it is today. At the time, NOC and IOC had envisioned forming a joint venture company to develop the pipeline project. However, after consulting different experts and engineers on the modality of the project, we came to a conclusion that a joint-venture modality for the pipeline project would be ineffective and we would have to opt for a government-to-government modality. Though NOC was convinced of constructing the project as per the government-to-government model, the issue was in the hands of the two governments and not between NOC and IOC. In between, Nepal went through various political changes and tensions, while the NOC too faced a financial crisis. The project finally edged closer to reality during Indian Prime Minister Narendra Modi’s visit to Kathmandu in 2014.

Finally, the two governments inked an agreement to execute the project in August 2015. However, project construction was delayed following the supply obstruction along the southern border. The project construction works finally began in April last year, with the mandate to complete the project within 30 months. However, the project got completed by the end of June this year, approximately within 14 months. Regarding the project completion, both NOC and IOC were committed towards completing this project as early as possible. Against the backdrop of different Nepal-India bilateral projects, we had been pressurising IOC to complete the project on time while NOC, through coordination with other government agencies and stakeholders, resolved project hurdles promptly to ensure timely completion of the project.

So, when will the project start commercial operation?

All the physical works regarding technology installation of the project have been completed. The first consignment of diesel that Nepal has received via the pipeline has cleared all Indian customs procedures and customs offices on both sides have developed necessary legal procedures and customs modality for the pipeline project. Thus, the project is just awaiting its inauguration through high-level government officials from both countries and it is likely that the executive heads of the two countries will inaugurate the project virtually. If everything goes as planned, the project will be inaugurated in the first week of August.

How will the pipeline project function?

Operation of the pipeline project will certainly add challenges for Nepal Oil Corporation, as we now need to enhance the fuel storage capacity in Amlekhgunj. We need to upgrade and enhance our depots and storage tanks as per the capacity of the pipeline. However, it is not that fuel supplied via the pipeline will cater to the entire demand of the country. In fact, the capacity of the pipeline to supply fuel and the demand for diesel in the country is close. Thus, it will be a great achievement even if we are able to supply only diesel as per the country’s demand through the cross-border pipeline. Moreover, we are planning to supply only diesel from the pipeline in the initial phase. In the first phase, we plan to distribute the pipeline-supplied fuel to NOC’s depots based in Birgunj, Pokhara, Amlekhgunj and Thankot. It should not be misunderstood that the country will now trade fuel with India only via Motihari-Amlekhgunj pipeline. It is cost-effective to supply fuel to different parts like Jhapa and other areas from nearby IOC depots over supplying from Amlekhgunj. However, the fact is the operation of the pipeline project will reduce transportation cost notably for the country.


 Akashya Kumar Singh

‘The pipeline will further cement the already strong bilateral ties between Nepal and India’

 Akashya Kumar Singh 

The Motihari Amlekhgunj pipeline project was completed before the set deadline. How was this possible?

The pipeline construction has been completed ahead of the set deadline. The foremost factor contributing to this was the utmost importance attached to the project by the leadership in Nepal and India, which is evident from the fact that the foundation stone was laid on April 7, 2018 by none other than the prime ministers of both the countries. Project progress was reviewed at regular intervals by respective ministries in Nepal and India and momentum of pipeline laying was maintained by granting expeditious clearances, be it for laying it through Parsa National Forest or alongside the Tribhuvan Highway by the government of Nepal. However, credit also goes to IOC for its project management abilities, who laid the pipeline under rivers and forests, roads and bridges and most of all through habitation without creating any disturbance to the public.

Horizontal Directional Drilling technique and Trenchless technologies were used for 6.5 km of the pipeline at more than 30 locations in Nepal where pipeline laying was not possible through conventional methods due to the presence of buildings, factories and other human settlements apart from marshy areas and water bodies in the pipeline route. Since the product required at Amlekhgunj was to be moved from Patna, construction and commissioning of the approximately 200-km-long Patna-Siwan-Motihari pipeline and associated facilities were synchronised for movement of product in Motihari-Amlekhgunj pipeline. Upon completion of the Nepal and India pipeline sections, the administrative support provided by respective governments was also a key factor. Not only was the project completed in a short duration, but the feat was also achieved with zero accident, which is a commendable achievement.

What does this project mean for NOC, IOC and the Nepal-India relationship?

The pipeline brings the much needed efficiency and reliability in the movement of petroleum products from India to Nepal. Petroleum products can now be made available in tanks at Amlekhgunj through a push of a button in India. There are huge benefits in terms of reduced cost of transportation, reduced pollution due to elimination of tanker movement, increased safety and reliability in operation and greater availability of road infrastructure for public Courtesy: IOC transport and movement of other commodities, both in India and Nepal. The list is long. The pipeline will be instrumental in making available petroleum products required by Nepali people on time. It will truly act as a catalyst in the growth of the Nepali economy. It would not be an exaggeration to say that the pipeline will further cement the already strong bilateral ties between Nepal and India.

Though construction of the project has been completed, it is yet to start formal operation. From when will the project start operations commercially?

The trial run of pipeline operation was successfully completed on July 19. Commercial operation of the pipeline will commence shortly. A go-ahead from the respective governments for movement of petroleum products through the pipeline is expected soon.

It is said that the project will ensure uninterrupted supply of fuel to Nepal. What’s your take on this?

It’s true. Problems associated with movement of petroleum products through tankers like traffic jams, waiting at check posts, long and uncertain lead times will no longer be there when the operation of the pipeline starts. Naturally, supplies will also be highly efficient and reliable and will not be affected due to floods or other natural calamities.

IOC is also expected to expand the pipeline project to other parts of Nepal and also work on liquefied petroleum gas pipeline. When will these works begin?

Government-to-government deliberations have taken place in this regard. Studies are in progress regarding extension of Motihari- Amlekhgunj pipeline to Chitwan and also for Muzaffarpur-Motihari-Chitwan LPG pipeline. Pre-feasibility studies for these pipelines are in progress for finalisation of Detailed Feasibility Report. A request has also been made by Nepal government for laying a natural gas pipeline from Gorakhpur in India to Sunwal, for which feasibility studies have been initiated.

The Himalayan Times

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