India To Nepal Oil Pipeline Inches Closer To Approval, Project Would Cut Fuel Transport Costs In Half

Work on a petroleum pipeline that will run from India to Nepal and cut transportation costs in half could finally get underway, according to announcements made Tuesday by Nepalese officials.

Suresh Kumar Agrawal, acting managing director of the Nepal Oil Corporation (NOC), said the company presented a revised proposal to the government's National Planning Commission (NPC) Tuesday that recommends having the Indian Oil Corporation build the pipeline first and then transfer operation responsibilities to Nepalese operators once it is paid for.

The company also said it's begun the land acquisition process necessary to start building the cross-border oil pipeline.

The project is estimated to cost 1.6 billion Nepalese rupees ($17.2 million), excluding costs for land acquisition.

Agrawal's technical committee previously sent a revised proposal in March but the NPC's vice-chairman and other members resigned shortly afterward, leaving the the project in limbo.

"With a new vice-chair in place at NPC, we have decided to meet soon for the project development," Agrawal told reporters.

The roughly 25-mile Raxaul-Amlekhgunj pipeline would import fuel from India into Nepal and would significantly ease oil transportation costs -- by more than 50 percent, according to a feasibility study conducted in 2006.

The project has been proposed and debated and revised since 1995 and was finally green-lighted for development in January 2013.