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India, Nepal to ink petroleum pipeline deal on Monday

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Credit: www.ndtv.com

Kathmandu: The much awaited Nepal-India petroleum pipeline project is set to take-off with the signing here on Monday of an MoU for construction of the 41-km Amlekhgunj-Raxaul petroleum pipeline with Indian assistance.

Nepal’s Minister for Commerce and Supplies Sunil Bahadur Thapa and Indian Minister for Petroleum and Natural Gas Dharmendra Pradhan will sign the framework agreement in this regard. The Memorandum of Understanding (MoU), to be signed between the two neighbouring countries, is about constructing a petroleum products pipeline from Raxaul (India) to Amlekhgunj (Nepal) and re-engineering of Amlekhgunj Depot and allied facilities.

Nepal’s ministry of commerce and supplies said the MoU would promote bilateral cooperation in the oil and gas sector and secure long-term supply of petroleum products to Nepal. Pradhan arrived here on Sunday for the signing of the MoU.

Credit: www.nepalmountainnews.com
Credit: www.nepalmountainnews.com

“It will further help to promote existing close and friendly relations between the two countries and their people. It would help save transportation cost, reduce leakage, and unhindered supply of petroleum products,” it said. The MoU will promote bilateral cooperation in the oil and gas sector and secure long-term supply of petroleum products to Nepal. It would help preserve the environment along the route and de-congest the international border at Raxaul, the Indian embassy here said in a release.

Nepal had requested India during Prime Minister Narendra Modi’s visit to the country on August 3-4, last year, for construction of this petroleum products pipeline. Bearing in mind the close and friendly relations between the two nations and their people, this was agreed to by the Indian government. On behalf of the Indian government, the Indian Oil Corporation (IOC) has been entrusted with the job to construct the pipeline and for re-engineering of the Amlekhgunj Depot and allied facilities.

The project will be completed in two phases. In the first phase, a petroleum products pipeline from Raxaul in India to Amlekhgunj in Nepal would be constructed.  The IOC will bear an expense of INR 200 crore for the first phase of the project. There will be a long-term contract of 15 years (initial contract for five years extendible for two terms of five years each) between IOC and the Nepal Oil Corporation (NOC) the state-owned petroleum supply monopoly.

The NOC will also contribute INR 75 crore for re-engineering the Amlekhgunj Depot. Thirty-nine kilometres of the proposed cross-border petroleum pipeline lies in Indian territory and the remaining two kilometres in Nepal.

(IANS)

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Coal consumption forecasts have already been downgraded significantly from 2013 projections, and major shifts in energy policy like Modi’s are likely to add significant weight to the idea that India might well become a much bigger player in renewable energy production in the next 20 to 30 years

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For any alternative to coal to be a serious consideration, there must be investment sources. Already India’s renewable target has attracted investors like Japan’s SoftBank, which agreed to a deal to sell power generated from a Northern Indian solar bank at 2.4 rupees per unit – below that of coal power, which currently costs over 3 rupees per unit.

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Not so long ago the Indian government had a target to connect 40 million households to the national grid by the end of 2018. It even tasked CIL, the state coal monopoly, to produce over a billion tonnes of coal per year by 2020, an increase of almost 100% from 2016. It’s an ambitious goal, notwithstanding the environmental impacts of mining for such an unprecedented amount of coal. This is the same coal that already generates 70% of India’s primary commercial energy requirement; compare that figure to the UK’s 11%, Germany’s 38%, and China’s 68%, while France has practically shut all of its coal power stations. This means that India’s shift from coal could have important implications for the global climate, and any investors looking towards coal would be making a very brave and risky decision.

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Environmentally, coal isn’t a sustainable source of power, certainly not in current quotas.

The increasing problem with relying on coal

Environmentally, coal isn’t a sustainable source of power, certainly not in current quotas. Clean-up costs could make coal an out-of-date power source sooner rather than later. A report by Oxford University estimated that investors in coal power may lose upwards of half a trillion dollars because assets cannot be profitably run or retired early due to global temperature rises and agreed carbon emission reductions.

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Coal consumption forecasts have already been downgraded significantly from 2013 projections, and major shifts in energy policy like Modi’s are likely to add significant weight to the idea that India might well become a much bigger player in renewable energy production in the next 20 to 30 years – although it’s difficult not to see coal remaining an important power source considering India’s significantly large coal reserves still available in Eastern India.