A major storage-capacity expansion project—featuring two new petroleum pipelines and an investment of around Rs 24.5 billion—has officially entered the implementation phase. The project aims to enhance the transport and storage capacity of petroleum products in Nepal.
A meeting held in Chitwan on Friday between officials of Nepal Oil Corporation (NOC) and the Indian Oil Corporation (IOC) decided to move forward with the extension of two petroleum pipelines: from Siliguri (India) to Charali in Jhapa, and from Amlekhgunj to Chitwan.
The Nepali delegation was led by NOC Deputy Managing Director Deepak Baral, while IOC’s Nepal Country Manager Nirupam Raizada headed the Indian team.
Nepal and India had previously signed a government-to-government (G2G) agreement to construct these projects. Under the agreement, India will provide grants for three components: the Siliguri–Jhapa pipeline, the Amlekhgunj–Lothar pipeline, and the fuel storage terminal in Jhapa. IOC will also build the Chitwan terminal, although NOC will finance its construction. IOC—owned by the Government of India—will implement all components. Of the total investment, IOC will contribute approximately Rs 15 billion as a grant, while NOC will invest around Rs 9.5 billion.
According to NOC Director Binitmani Upadhyay, the meeting focused on advancing the projects into the implementation stage. “Both sides have agreed to move forward according to their respective responsibilities,” he said. Upadhyay added that the design for the greenfield terminal in Lothar has been finalized and signed.
The IOC delegation included senior officials such as Anirudha Thatte (GM, New Business), Rajat Sarkar (GM, Finance and Pipelines), Apil Agrawal (GM, PJ–S&G), and Deputy General Manager Pravin Kumar. The Nepali delegation included NOC Deputy MD Baral, Purna Prasad Rijal, Directors Upadhyay and Suraj Shah, and Deputy Directors Nawabinod Pokharel, Pradeep Yadav, and Surendra Mahato.
The Siliguri–Jhapa pipeline—approximately 50 kilometers long—includes 35 kilometers in India and 15 kilometers in Nepal. A storage facility with an 18,900-kiloliter capacity will be established in Charali, Jhapa, with 6,600 kiloliters allocated for petrol and 12,300 kiloliters for diesel.
In Lothar, Rapti Municipality of Chitwan, a major storage terminal with a capacity of 91,900 kiloliters will be constructed. It will include storage for 33,000 kiloliters of petrol, 46,500 kiloliters of diesel, 1,600 kiloliters of kerosene, and 10,800 kiloliters of aviation fuel.
Pradeep Yadav, coordinator of the Lothar–Chitwan Pipeline Project, confirmed that land acquisition for the Chitwan terminal has been completed. “All necessary land in Chitwan has been secured, and the project has now entered the implementation phase,” he said.
The Siliguri–Jhapa pipeline will supply fuel to eastern Nepal, particularly Koshi Province, helping ease pressure on the Motihari–Amlekhgunj pipeline, which currently cannot meet nationwide demand. The Amlekhgunj pipeline will be extended to Chitwan to improve distribution efficiency. The Jhapa terminal will have a storage capacity of 42,000 kiloliters, while the Lothar terminal will store 103,150 kiloliters.
Kathmandu and Pokhara are the country’s largest fuel-consuming cities, and the new Chitwan pipeline is expected to reduce transportation costs significantly. Pipeline-based fuel transport is safer, more reliable, and more economical than tanker transport, reducing leakage, theft, contamination, road accidents, and pollution.
The G2G agreement for these projects was signed in India during the visit of then Prime Minister Pushpa Kamal Dahal. The agreement, witnessed by Dahal and India’s Prime Minister Narendra Modi, was signed by then Minister for Industry, Commerce, and Supplies Ramesh Rijal and Indian Petroleum Minister Hardeep Singh Puri. All projects are targeted for completion within 54 months.
The Motihari–Amlekhgunj pipeline, operational since September 10, 2019, demonstrated the benefits of pipeline-based petroleum transport, prompting NOC to move ahead with additional pipeline projects.
