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Amalekhgunj-Lothar pipeline to save Rs. 4 billion annually



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By Laxman Kafle
Kathmandu, Mar. 10: The feasibility study of the construction of pipeline connecting Amalekhgunj in Bara district to Lothar in Chitwan district has been completed.
A Joint Study Group of Nepal Oil Corporation (NOC) and the Indian Oil Corporation (IOC) has submitted its technical report to the Ministry of Industry, Commerce and Supplies recently. The Joint Study Group had conducted the study on the cost, pipe laying works and other aspects of the project. After the successful construction of the Amlekhgunj-Motihari Petroleum Pipeline Project, the NOC had expedited works to expand and add new petroleum pipeline projects—Amlekhgunj, Bara to Lothar in Chitwan and Siliguri of West Bengal, India, to Charaali in Jhapa.
As per the report, the 62-kilometre-long pipeline from Amalekhgunj in Bara to Chitwan, including terminal, is estimated to cost around Rs. 14.27 billion, said Urmila K.C., joint spokesperson of the Ministry of Industry, Commerce and Supplies.
The estimated cost for the pipeline is Rs. 4.38 billion and Rs. 9.88 billion for the construction of a modern depot, she said.
She, however, said that the projection cost of the project can fluctuate by 30 per cent.
“The ministry will discuss with the concerned authority of IOC and the government of India about the investment and support for project construction. Firstly, the ministry will table a proposal regarding the project based on the report to the Cabinet for approval,” she told The Rising Nepal.
The modality of project construction of Amlekhgunj-Lothar will be finalised after the governments of both countries hold discussions on the technical report submitted by the joint team, she said.
The Motihari-Amlekhgunj pipeline had been constructed with the investment of Rs. 4 billion of the government of India and Rs. 2 billion of NOC.
Surendra Kumar Paudel, managing director of NOC said that pipeline will be constructed along with modern laboratory, smart terminal and full automated depot with a capacity to hold 103,000 KL fuel in Lothar.
Currently, NOC has a storage capacity of 71,000 KL across the country.
The existing petroleum pipeline from Motihari to Amalekhgunj will be extended to Lothar by laying the pipes.
Earlier, Nepal and India had agreed to expand the pipeline to Lothar from Amlekhgunj.
Now the technical report will be discussed in the ministry and the work will move forward, he said.
The government has taken initiative to expand the pipeline to Lothar from Amlekhgunj for optimum utilisation of pipeline as NCO is using only one third capacity of the constructed pipeline due to lack of storage capacity, he said.
Diesel has been coming through the pipeline from Motihari in India for the past one year and the work of bringing petrol through the same pipeline will start within a year.
With the expansion of the petroleum pipeline from Amlekhgunj to Lothar, it is expected that the problem of fuel shortage in western and northern Nepal will come to an end.
Paudel said that above Rs. 4 billion transportation cost of NOC would be saved once the pipeline project comes into full use. Currently, NOC is spending around Rs. 6 billion for the transportation of fuel in a year.
“So, NOC is in a hurry to construct the pipeline from Amlekhgunj to Lothar. The investment of the project would be recovered in three-four years,” he said.