Indian Oil Corp in pact to meet Nepal's POL needs for next 5 years

Indian Oil Corporation Limited signed an agreement with Nepal Oil Corporation on Tuesday under which it will meet all requirements of all major POL products of Nepal, including petrol, diesel, kerosene, aviation turbine fuel and LPG for the next five years.

The supply agreement signed with Nepal Oil Corporation on Tuesday is valid for the period from April 2017 to March 2022 and will meet NOC's full requirements of all the major POL products, including petrol, diesel, kerosene, aviation turbine fuel and LPG.

The new agreement is based on the concept of 'Umbrella Agreement' by keeping the provisions of future MoUs / agreements subsidiary to this.

A provision has also been kept for collaboration in new fields like engineering, projects, aviation fuelling, retail sales, petrochemicals, business developments and LPG ventures.

Indian Oil Corp will supply 1.3 million tonnes a year of refined fuels to Nepal, the company's chairman B Ashok told a news conference.

As well as refined products, India was discussing plans to supply gas to Nepal, Indian oil minister Dharmendra Pradhan said at the same news conference.

Indian Oil will also start releasing BS-IV grade fuels to Nepal from its supply points with effect from 1 April 2017 to convert Nepal's markets to the green fuel.

The minister said the two nations were considering building a refined products pipeline linking Motihari in India's eastern state of Bihar to Amlekhgunj in Nepal.

The agreement provides for laying of the Patna-Motihari-Amlekhganj Pipeline for meeting the major requirements of POL products of Nepal. This pipeline will have the flexibility to receive products from Indian Oil's Barauni and Haldia refineries.

Nepal Oil may nominate, with prior written advice to Indian Oil, any other supply point to uplift POL products.

Indian Oil started supply of POL and LPG products to Nepal Oil Corp in 1974 when the first supply agreement was signed. Thereafter, the agreement was renewed periodically.

New Delhi has used its surplus refining and power generation capabilities to deepen ties with nations such as Sri Lanka, Bhutan, Bangladesh and Myanmar, as well as Nepal.

China wants to include Nepal in its flagship `One Belt, One Road' initiative to link Asia with Europe, the Middle East and Africa.