APRIL 7TH 2009

New Delhi: An Indian Oil Corp. Ltd (IOC) pipeline project, which is expected to reduce oil transportation cost to Nepal by as much as 60%, has gained momentum with the visit of Pushpa Kamal Dahal, the Himalayan nation’s prime minister, to India last week.

IOC, India’s top refiner, has decided to give a push to the project as a confidence-building measure. “IOC will invest in setting up the pipeline. The plans are at a preliminary stage,” said S.V. Narasimhan, its director of finance. He did not say how much it could cost.

IOC is the sole supplier to Nepal Oil Corp. Ltd (NOC), the state-owned marketer of petroleum products in that country. The project proposes to link an IOC facility at Raxaul in Bihar with NOC’s main terminal 29km away at Amalekhganj across the border.

“Once the pipeline is constructed, we expect the things to improve as it will reduce the transportation cost by up to 60%,” said Umesh Prasad Dahal, deputy managing director (marketing) at NOC. Fuel products are currently transported from India by trucks.

A Nepal government official, asking not to be named, said the prime minister had pushed for expediting the pipeline project during his four-day tour to India that ended on 18 September 2009