Construction work on the second phase of South Asia’s first cross-border petroleum pipeline has formally commenced in Nepal, extending the Indo-Nepal energy corridor deeper into the Chitwan region under Indian government assistance.
The project, stretching from Amlekhgunj in Bara to Lothar in Chitwan, involves a 62-kilometre pipeline and the construction of a modern petroleum storage facility. The Nepal Oil Corporation (NOC) has inaugurated a dedicated field office at Lothar, marking the beginning of groundwork for the extension.
Once completed, petroleum products will be pumped directly from the Indian Oil Corporation’s (IOC) Motihari depot to the Lothar terminal, via a 10.75-inch diameter pipeline running parallel to Nepal’s East-West Highway.
According to project chief Pradeep Kumar Yadav, all preparatory documentation has been completed. “Road construction and coordination with IOC will begin immediately, with plans to complete and operate the project within three years,” he said.
The initiative is expected to reduce fuel theft, prevent adulteration, and minimise environmental impact. Yadav assured that the project would closely coordinate with local communities, generating employment and economic opportunities.
NOC’s Assistant Manager Anupam Parajuli stated that the pipeline will transport fuel at a rate of 273 kilolitres per hour and has an annual projected capacity of 2 million tonnes.
The Lothar terminal will be developed as a Smart Greenfield Terminal, spread over approximately 23 bighas and 12 kathhas of land in Rapti Municipality-1. It will house three vertical petrol tanks of 11,000-kilolitre capacity each, three diesel tanks totalling 15,500 kilolitres, and two tanks with a combined 800-kilolitre capacity for kerosene.
Rapti Municipality-1 Ward Chairperson Siddhalal Syangtang hailed the project as a “prestigious” one for the Chitwan region.
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A 160-square-metre plot has been earmarked for a pipeline station in Lothar, further enhancing Nepal’s petroleum storage infrastructure, which aims for three-month capacity reserves.
The broader Indo-Nepal pipeline project, considered South Asia’s first of its kind, was initiated through bilateral collaboration. The first phase, a 78-kilometre pipeline between India’s Motihari and Nepal’s Amlekhgunj, was completed just before the onset of the COVID-19 pandemic. Of that, 42 kilometres lie within Nepal, with the remainder inside Indian territory. The Government of India had invested Rs 3.5 billion in the Motihari-Amlekhgunj section.
The foundation stone for the first phase was jointly laid by Nepali Prime Minister KP Sharma Oli and Indian Prime Minister Narendra Modi at Hyderabad House, New Delhi, during Oli’s 2018 state visit.
On October 3, 2024, both governments signed a B2B Framework Agreement to further expand petroleum infrastructure in Nepal. The agreement between NOC and IOC includes the construction of two new petroleum pipelines—from Siliguri to Charali in Jhapa and from Amlekhgunj to Lothar.
Indian Ambassador to Nepal Naveen Srivastava, announcing the developments a day later, confirmed, “There is also an agreement that Indian Oil Corporation will build two new Greenfield terminals for storing oil and petroleum products in Jhapa and Chitwan. These agreements are follow-ups to those signed during former Prime Minister Prachanda’s visit to India last year.”
The 50-kilometre Siliguri-Charali pipeline will be supported by a Smart Terminal with a storage capacity of 18,900 kilolitres. The Lothar terminal, constructed by NOC with Indian technical assistance, will boast a massive 91,900 kilolitre storage facility.
The total cost of the pipeline extensions and terminal projects is estimated at Rs 15 billion. Approximately 70 per cent of Nepal’s petroleum imports pass through the Amlekhgunj entry point, underscoring the strategic importance of the ongoing expansion.
The two countries had originally signed the memorandum of understanding for the pipeline in Kathmandu on August 24, 2015, during a visit by Indian Petroleum Minister Dharmendra Pradhan.
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