THURSDAY, JANUARY 29, 2004
Indo-Nepal oil pipeline gets nod
SANJAY DUTTA
TIMES NEWS NETWORK
NEW DELHI : Pipeline diplomacy is set to tie New Delhi and Kathmandu into a permanent energy relationship, with the Nepal government clearing in principle a pipeline to wheel petroproducts from India and a JV with IndianOil Corporation (IOC) for cooking gas plants.
Diplomatic sources said the pipeline will link Nepal 's main distribution depot at Amalekhganj, about 175 km south of Kathmandu , with IOC's supply centre at Raxaul in Bihar on the Indo-Nepal border.
Simultaneously, Kathmandu has also agreed to a JV between its flagship Nepal Oil Corporation and IndianOil for setting up two plants to bottle cooking gas in the kingdom. Both Nepal Oil and IndianOil are in the process of vetting the draft agreements for the proposals. The agreements are likely to be signed soon as India 's ambassador Shyam Saran is taking an initiative to see the deals through.
IndianOil officials declined to comment. But sources said the finance ministry has agreed to consider IndianOil's sales to Nepal as exports, even though the company receives payments in Indian currency under a rupee trade agreement. An export status on sales will allow IOC to claim duty drawback. Nepal is gradually deregulating its oil market and needs about 0.7 million tonnes of petroproducts, including 60,000 tonnes of cooking gas a year. While the annual rate of cooking gas consumption is rising at 15-16 per cent, diesel sales is growing at 6 per cent and gasoline 10 per cent.
IOC is meeting Nepal 's entire petroproducts demand after the two countries renegotiated an earlier deal wherein India merely allowed Kathmandu transit facilities for imports, a costly proposition. The pipeline will help Kathmandu save on transportation time and curb adulteration of the fuels while being hauled across the border in truck-tankers.
For IndianOil, the pipeline will ensure for the company a captive market.
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