Kathmandu, July 18

The much-hyped Motihari-Amlekhgunj oil pipeline project will start commercial operation by August following virtual inauguration of the Nepal-India bilateral project by executive heads of the two countries.

As the project has been completed and is awaiting its formal inauguration, Nepal will officially start fuel trade with India via the pipeline after Prime Minister KP Sharma Oli and his Indian counterpart Narendra Modi formally launch operation of the project.

Though the date for the official inauguration of the project is yet to be fixed, the Ministry of Foreign Affairs and Nepal Oil Corporation confirmed that groundwork is under way to virtually inaugurate the project by the two prime ministers. According to NOC, the two governments are working to ensure that inauguration of the project takes place in the first week of August.

Meanwhile, MoFA sources said there was also the possibility of the petroleum project being inaugurated by the heads of state of the two nations as President Bidhya Devi Bhandari, during her recent visit to India, had invited her counterpart Ram Nath Kovind for an official visit to Nepal. Although the exact date has not been fixed, preparations are under way for Kovind’s Nepal visit, the source said.

“While the first option is more likely, the two governments are also exploring the possibility of the second option,” said a MoFA source, who did not want to be named.

The virtual inauguration of the project will be done through video conferencing, where the two prime ministers will press a button in New Delhi and Amlekhgunj, resulting in opening of the valve of the petroleum pipeline, stated NOC.

The Motihari-Amlekhgunj oil pipeline was first proposed in 1996. However, the project

finally edged closer to reality during Indian PM Modi’s visit to Kathmandu in 2014. The two governments had inked an agreement to execute the project in August 2015. However, project construction was delayed following the 2015 earthquake and 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.

Interestingly, the project was completed much ahead of the deadline and is ready for commercial operation.

Moreover, NOC and Indian Oil Corporation today successfully concluded the ‘testing transfer’ of the Motihari-Amlekhguni pipeline project. The IOC, through its refinery in Motihari, had supplied diesel to NOC’s Amlekhgunj-based depot yesterday which NOC is expected to receive tomorrow morning. However, NOC will unload only 1,000 kilolitres of the 3,100-kilolitre diesel supplied by IOC via the pipeline to test the newly constructed tanks at Amlekhgunj. The commercial operation of the cross-border project will be marked by unloading the remaining diesel following virtual inauguration of the project.

Though the initial cost of the project was estimated to be INR 2.75 billion, where the Indian government would inject INR 2 billion, NOC stated that total project cost escalated to almost INR 3.25 billion due to the delay.

Along with reducing huge transportation cost for NOC, commercial operation of the oil project will also ensure reduction in fuel price in the domestic market. “Commercial operation of the cross-border fuel project will bring down fuel price by at least one rupee per litre,” said Sushil Bhattarai, deputy executive director at NOC.