Kathmandu, July 22

The much-hyped Motihari-Amlekhgunj oil pipeline, which is expected to start commercial operation next month, will supply only diesel initially for a certain period, as per Nepal Oil Corporation.

Citing that the demand for diesel accounts for almost 70 per cent of the total fuel trade in the country and that the flow of a single product through the pipeline will ease operation of the project, the state-owned fuel supplier has informed about its plan to supply only diesel through the bilateral pipeline project. However, NOC has clarified that supply of petrol and kerosene can also be made through the cross-border pipeline.

“The demand for diesel in the country is so high that even if we are able to meet the demand of only diesel via the pipeline, it will be a great achievement. We plan to import petrol and kerosene through the pipeline only after supplying necessary quantity of diesel,” Sushil Bhattarai, deputy executive director at NOC, told THT.

The pipeline has the capacity to supply 294 kilolitres of fuel per hour.  However, NOC is not in a position to operate the pipeline for 24 hours a day due to lack of ample fuel storage capacity. In such a condition, NOC plans to operate the pipeline for a maximum of 15 hours a day gradually.

If the pipeline is operated 15 hours a day, NOC will get 4,410 kilolitres of fuel per day and 132,300 kilolitres of fuel per month. Monthly demand of diesel alone is 160,000 kilolitres.

“The challenge for NOC is to maintain effective supply of diesel over other fuels whose demand is much lower. We plan to use the pipeline to supply only diesel, at least till NOC develops enough storage infrastructure and collects experience in operating the pipeline,” added Bhattarai.

The monthly demand for petrol, kerosene and aviation fuel stands at 45,000 kilolitres, 2,000 kilolitres and 18,000 kilolitres, respectively.

Bhattarai also mentioned that commercial transfer of multiple products via the pipeline is comparatively difficult, as NOC does not have enough expertise to handle that.

Prime Minister KP Sharma Oli and his Indian counterpart Narendra Modi are expected to virtually inaugurate the pipeline project in August, thereby commencing the commercial fuel trade with India via the pipeline.

The Motihari-Amlekhgunj oil pipeline was first proposed in 1996. However, the project finally edged closer to reality during Modi’s visit to Kathmandu in 2014. The two governments inked an agreement to execute the project in August 2015. The construction of the project, which began in April last year, is expected to ensure smooth supply of petroleum products in the country and also notably reduce transportation cost for NOC.