Indian Oil Corporation and Nepal Oil Corporation signed a Business to Business (B2B) Framework Agreement today paving the way for the development of critical petroleum infrastructure projects in Nepal.
This agreement follows the Government-to-Government (G2G) Memorandum of Understanding (MoU) signed earlier between India's MoP&NG and Nepal's Ministry of Industry, Commerce and Supplies (MoICS) on 31 May 2023.
The G2G MoU encompasses the extension of the Motihari - Amlekhgunj Petroleum Pipeline (MAPL) — South Asia's first transnational petroleum product pipeline, commissioned in 2019 — to Chitwan, Nepal. Additionally, the MoU covers the construction of oil storage terminals at Chitwan and a new transnational pipeline from IndianOil's facility in Siliguri to Jhapa alongside an oil storage terminal at Jhapa. These projects are expected to transform petroleum logistics between the two countries. These pipelines have been designed to meet the future energy needs of Nepal, with ample storage capacity at both the Chitwan and Jhapa terminals.
The B2B Framework Agreement signed today enables IndianQOil and NOC to take up construction on these vital projects. This collaboration is crucial for optimizing the transportation of petroleum products, which will significantly reduce costs for Nepal Oil Corporation by minimizing reliance on tank trucks. Furthermore, the infrastructure is designed for mitigation of handling losses & environmental risks, alleviation of border
congestion and strengthening of Nepal's energy security — especially during natural disasters such as floods and landslides.