The Indian Oil Corporation (IOC) and Nepal Oil Corporation (NOC) have held a comprehensive review of their bilateral relations and have agreed to develop a number of pipelines between the two countries to supply landlocked Nepal with oil, natural gas and LPG.
The oil pipeline, a 69-km connection between Motihari, India and Amlekhgunj, Nepal, will provide an alternative to trucks for the supply of petroleum products. Construction has already begun on the Nepal side and the pipeline will be completed in its entirety by 2019.
The natural gas and LPG pipelines will follow the same route as the oil system. Nepal would use the natural gas for a fertilizer plant. And the government says the pipeline will ultimately result in savings of around Rs 2 billion annually for the country by eliminating tanker trucks from India.
Diesel and natural gas for cooking made up for 80 percent of the total fuel import bill of Rs170 billion during the last fiscal year.