Nepal Oil Corporation (NOC) was established in January 1970 by the Government of Nepal as a state-owned trading company to deal with the import, transportation, storage and distribution of various petroleum products in the country. NOC, headquartered in Kathmandu, has Five Regional Offices and also Branch Offices, Fuel Depots and Aviation Fuel Depots with total storage capacity of 71,622 Kilolitres (KL) and around 600 employees.
Nepal is a land locked country bordering three sides by India and the northern part of snow fed Himalayas by Tibet/China. Nepal does not produce any oil and depends totally on imports in the refined form, as it does not have any oil refinery. NOC is the sole organization responsible for the import and distribution of petroleum products through around 1500 Tank Trucks and 1500 retail outlets owned by the private sector around all parts of the country.
Nepal is becoming more dependent on petroleum products for meeting its energy requirement. The demand of products like MS, HSD, SKO, ATF and LPG is about 1.2 million ton (MT) per annum with annual increase by around 10%. Petroleum products constitute about 15% of total energy consumed in Nepal. The nearest sea port from Nepal is Haldia(Kolkata) which is about 900 km from nearest Indo-Nepal border. The long transportation distance from nearest sea port to Nepal is the main constraint for import of POL from third country.
All the petroleum products consumed in Nepal are procured and imported from Government of India (GOI) undertaking national oil company, i.e. Indian Oil Corporation Ltd (IOC) under a 5 years' Contract Agreement signed on 27th March 2017. NOC uplifts petroleum products as per its requirement from IOC's different refineries, terminals and depots situated in eastern and northern part of India. The supply of LPG is arranged under a PDO (Product Delivery Order) system and IOC is providing Bulk LPG to Nepalese LPG industries from Haldia, Barauni, Mathura & Panipat refineries. Meeting the ever increasing demand of LPG in Nepal has always been a concern to NOC.
The transportation from IOC locations to NOC depots and to retail outlets is done by Tank Trucks. To meet the increasing demand, a MOU between IOC and NOC for construction of cross border Petroleum Product Pipeline from IOC's depot (Raxaul) to NOC's depot (Amlekhgunj ) has been signed.
The Detailed Feasibility Report (DFR) of the proposed pipeline has also been prepared and the construction/investment modalities are under discussion between the companies. Similarly, the scope of laying LPG pipeline across Indo-Nepal border has also come in the discussion between the companies.