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Kathmandu, Aug 5: Nepal Oil Corporation (NOC) has started construction of its second petroleum pipeline, linking Amlekhgunj in Bara to Lothar in Chitwan. The project was inaugurated last Friday near the Rapti River in Lothar, with Project Chief Pradeep Yadav opening a field office at the site.

The 62-km pipeline will extend from NOC’s Amlekhgunj depot to a new terminal in Lothar. A large fuel storage facility with a total capacity of 91,900 kiloliters will be built there. NOC had purchased 23 bighas of land in Rapti Municipality in 2016 for this purpose at a cost of around Rs 710 million.

Indian Oil Corporation (IOC) has prepared the detailed project report (DPR). As per the DPR, the 10.75-inch diameter pipeline will handle pressure up to 173.5 kg/cm² and transport 273 kiloliters of fuel per hour. The estimated total cost is INR 8.81 billion (about Rs 14.09 billion).

The project is expected to cut fuel transport costs and reduce risks of theft and leakage. Currently, fuel is transported by tanker trucks. Construction is targeted to finish within 54 months under a Business-to-Business (B2B) deal between NOC and IOC.

A formal B2B agreement for two cross-border pipelines—Siliguri to Charali and Amlekhgunj to Lothar—was signed in New Delhi on October 3, 2024. It followed a Government-to-Government (G2G) agreement signed during Prime Minister Dahal’s India visit on June 1, 2023.

Under the B2B deal, IOC will cover INR 2.68 billion (Rs 4.28 billion) for the pipeline. NOC will fund the terminal and storage facilities at a cost of INR 6.13 billion (Rs 9.8 billion), with technical help from India.

The Lothar terminal will house a large-scale petroleum storage facility with a total capacity of 91,900 kiloliters. It will include three tanks of 11,000 kiloliters each for petrol, three tanks of 15,500 kiloliters each for diesel, two tanks of 800 kiloliters each for kerosene, and three tanks of 3,600 kiloliters each for aviation fuel. Additionally, two transmix tanks with a capacity of 250 kiloliters each will be constructed, along with four underground tanks—each holding 50 kiloliters—for storing petrol, diesel, kerosene, and aviation fuel.

People’s News Monitoring Service