Nepal Oil Corporation (NOC) has officially begun the construction of its second petroleum pipeline project, connecting Amlekhgunj in Bara to Lothar in Chitwan. The construction phase kicked off with the development of infrastructure near the Rapti River in Lothar, and a new project office was opened by Project Chief Pradeep Yadav to oversee the activities.
The pipeline will span 62 kilometers and link NOC’s existing facilities in Amlekhgunj to a new greenfield terminal in Lothar. This terminal will house a massive petroleum storage complex with a capacity of 91,900 kiloliters. NOC had acquired over 23 bighas of land in Rapti Municipality back in 2016 for about Rs 710 million for this purpose.
Indian Oil Corporation (IOC) has completed the Detailed Project Report (DPR), which specifies that the pipeline will be 10.75 inches in diameter, with a pressure capacity of 173.5 kg/cm² and a flow rate of 273 kiloliters per hour. The total estimated cost of the project, including the pipeline and storage facilities, is INR 8.81 billion (around Rs 14.09 billion).
The construction of the pipeline is part of a broader bilateral energy cooperation initiative between Nepal and India. A Business-to-Business (B2B) agreement between NOC and IOC outlines the project timeline of 54 months, with the pipeline expected to reduce transportation costs and minimize fuel theft. The project is also backed by a Government-to-Government (G2G) agreement signed during Prime Minister Pushpa Kamal Dahal’s visit to India in 2023.
Under the B2B terms, IOC will finance the INR 2.68 billion (Rs 4.28 billion) needed for laying the pipeline, while NOC will cover INR 6.13 billion (Rs 9.8 billion) for the terminal and storage construction, with technical assistance from India.
The planned storage facility at Lothar will include:
- Petrol: Three tanks of 11,000 kiloliters each (total 33,000 KL)
- Diesel: Three tanks of 15,500 kiloliters each (total 46,500 KL)
- Kerosene: Two tanks of 800 kiloliters each (total 1,600 KL)
- Aviation Fuel: Three tanks of 3,600 kiloliters each (total 10,800 KL)
- Transmix: Two tanks of 250 kiloliters (total 500 KL)
- Underground tanks: Four 50-kiloliter tanks for each fuel type (total 200 KL)
Once completed, this project is expected to enhance the efficiency, safety, and capacity of petroleum distribution in Nepal, especially in the central and western regions.
