India, Nepal inaugurate South Asia’s first cross-border oil pipeline

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South Asia’s first cross-border oil pipeline with an annual capacity of 2 million metric tonnes was jointly inaugurated via video conference on Tuesday by Prime Minister Narendra Modi and his Nepalese counterpart KP Sharma Oli.

The pipeline, which runs from Motihari in Bihar to Amlekhgunj in Nepal, will replace tankers that carry petroleum products from India as part of an arrangement put in place in 1973. India, Nepal’s sole supplier of oil, funded the Rs 324-crore project.

Speaking on the occasion, Oli expressed appreciation for the early implementation of the important connectivity project, which was completed about 15 months ahead of schedule. “We have similar visions of development, prosperity and happiness of our people, backed by solid political commitment and strong determination to realise them,” he said.

Modi said the 69-km pipeline will provide cleaner petroleum products at affordable prices to the people of Nepal. He welcomed Oli’s announcement on reducing the price of petroleum products in Nepal by Rs 2 per litre.

Nepal Oil Corporation (NOC) hopes to save Rs 2 billion a year on the transportation of petroleum products by using the pipeline.

Modi noted that regular exchanges at the highest political levels of the two countries have helped create a forward-looking agenda for expanding the bilateral partnership. Modi expressed confidence that ties between India and Nepal will continue to deepen and expand across diverse sectors.

Oli extended an invitation to Modi to visit Nepal, which was accepted by the premier, an official statement said.

The pipeline is being perceived as part of India’s efforts to retain its influence in Nepal, where China has made inroads in recent years by funding infrastructure and connectivity projects. The implementation of India-funded projects in Nepal has gained momentum following talks between Modi and Oli last year, officials said.

Nepal currently consumes 2.66 million tonnes of oil and 480,000 tonnes of cooking gas, currently supplied from half a dozen Indian depots.