A joint Indian-Nepalese working group met earlier this month via online video conferencing to discuss enhanced energy cooperation between the two countries and in particular the construction of another petroleum products pipeline to satisfy growing demand in Nepal. 

The meeting was attended by top government officials from the Indian side including representatives from IndianOil, GAIL, and HPCL. The Nepalese side was represented by the country's Ministries of Finance and Foreign Affairs and Nepal Oil Corporation (NOC).

The new pipeline the group is proposing would run into the northern and eastern parts of Nepal.

An Indian industry expert who asked not to be named said that "a team of officials would soon visit Nepal to explore the possible routes for a new product pipeline. This would be followed by establishing feasibility studies before investment decisions are worked out. There is potential for expanding the pipeline network that would bring a lot of savings for the Himalayan country."

Before the existing petroleum products pipeline was built products were being transported from India to Nepal by tankers/trucks at 13 pick-up points (7 for products and 6 for LPG). The Raxaul-Birgunj was the most important trade point between the two countries but the pipeline has reduced the movement of tanker trucks from these points to consumption centres in Nepal.  The new pipeline will presumably also improve the transport efficiency of such products.

The joint working group also discussed a larger role for India in building oil production storage capacities in Nepal. It is envisaged that Indian and Nepalese companies may cooperate in this regard as well.