KATHMANDU: An agreement on the Raxaul-Amlekhgunj pipeline project has been signed between Nepal and India in order to help ease the supply of petroleum products to Nepal.

Minister for Commerce and Supplies Sunil Bahadur Thapa and Indian Minister of State for Petroleum and Natural Gas Dharmendra Pradhan signed the agreement at a function held in the Capital today.

The pipeline from Raxaul to Amlekhgunj spreading over 41 kilometers is expected to cost Rs. 4.4 billion. It is a joint investment project between the two countries including Rs. 3.2 billion from the Indian side and Rs. 1.2 billion from Nepal.

After completion of the project, the pipeline will help reduce transportation cost by around Rs. 700 million annually and also ease traffic jam called due to oil tankers in the border area, according to the Nepal Oil Corporation.

Speaking after the signing ceremony, Minister Thapa said the project initiated around 20 years ago has finally been realised and expressed the confidence that it would be completed before the estimated deadline of 30 months. “It will not only ease fuel supplies, but also reduce its cost”, he said.

Indian Minister of State Pradhan said the project is a priority of both the governments, with Indian Prime Minister Narendra Modi’s Nepal visit playing an instrumental role in realising the agreement that has been signed today.