Kathmandu, April 23

An 11-member delegation led by Dharmendra Pradhan, minister of State for Petroleum and Natural Gas of India arrived in Kathmandu, on Sunday, to sign the Raxaul-Amlekhganj petroleum pipeline deal. His delegation comprises high-level officials from the Ministry of Petroleum and Natural Gas, Ministry of External Affairs and from Indian Oil Corporation.

The long-awaited Nepal-India petroleum pipeline deal is expected to be signed at 11:30 in the morning tomorrow, according to officials of the Ministry of Commerce and Supplies. “The framework agreement at the government-to-government (G2G) level will be signed by Commerce Minister Sunil Bahadur Thapa and his counterpart Pradhan.”

The Cabinet of India, chaired by Prime Minister Narendra Modi, had approved the draft framework agreement last week. It had been forwarded by Nepal, in May, seeking the Indian government’s consent.

Indian Oil Corporation (IOC), on behalf of Indian government has been entrusted with project implementation that has two components — laying of 41 km pipeline and re-engineering of Amlekhganj depot. As per officials privy to draft agreement, IOC will invest INR two billion for the first phase and there will be a long-term contract of 15 years between  IOC and Nepal Oil Corporation (NOC) — state owned petroleum supply monopoly — and initial contract will be signed for five years which can be extended for two terms of five years each.

NOC will also contribute INR 750 million for the project for upgradation and compatibility of Amlekhganj depot. Thirty-nine kilometres of the proposed cross-border petroleum pipeline lies on Indian territory and the remaining two kilometres in Nepal.

NOC and IOC will sign another pact for construction of pipeline and re-engineering of depot after framework agreement has been signed at the G2G level.