India mulls building LPG and natural gas pipelines to Nepal

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SME Times News Bureau | 21 Jan, 2015
India will explore the feasibility of building LPG (liquefied petroleum gas) and natural gas pipelines to Nepal, after the two neighbours agreed to build a petroleum pipeline link, a statement here Wednesday said.

During a meeting earlier in the week between Indian Minister of State for Petroleum and Natural Gas Dharmendra Pradhan and Nepal's Minister for Commerce and Supplies Sunil Bahadur Thapa in New Delhi, the Indian side agreed to send a technical team to Nepal to study the feasibility of laying LPG and natural gas pipelines.

Pradhan assured Thapa that LPG would be supplied to Nepal in adequate quantities without interruption.

Nepal is totally dependent upon India with regard to petroleum products, and LPG and natural gas supplies.

The Indian government also directed the state-owned Indian Oil Corporation's (IOC) refinery in Barauni to increase the quota of LPG for Nepal. The refinery has been ordered to boost LPG supplies to 30,000 tonnes monthly from February. Nepal presently receives 22,000 tonnes of the cooking fuel per month.

The two sides agreed to continue their cooperation and explore avenues of cooperation in other possible areas in the oil and gas sector, a statement issued jointly after the meeting concluded said.

According to Nepal Oil Corporation (NOC), consumption of LPG surged 14.12 percent to 207,038 tonnes in the 2012-13 fiscal. Nepal's LPG import bill amounts to around Nepali Rs.20 billion (Rs.12.50 billion) annually.

Because of the surge in the demand for LPG and other petroleum products, the country considered the building of pipeline as the best option, said Nepali officials.

According to the National Population and Housing Census, 2011, about 21.03 percent of Nepali households use LPG. In cities, the figure is 67.68 percent.

Demand for LPG is high in urban areas because of the presence of a large number of hotels, restaurants and other industries, which use the fuel due to an increasing electricity deficit.

At present, Nepal suffers from 75 hours of weekly power cuts.