A new pipeline project to export petroleum from India to Nepal has been approved.

India’s Petroleum & Natural Gas Minister Dharmendra Pradhan and Nepal’s Minister of Commerce and Supplies Sunil Bahadur Thapa singed a Memorandum of Understanding (MoU) this week.

The 41km pipeline will stretch from Raxaul in India to Amlekhgunj in Nepal.

The Himalayan nation relies on India to meet its fuel requirements, with $1.1 billion (£0.7bn) worth of petroleum products imported every year.

Indian Oil Corporation (IOC), which will develop the project, claims it currently exports petrol, diesel, domestic Liquefied Petroleum Gas (LPG) and jet fuel to Nepal.

It is investing Rs200 crore in the project while the Government of Nepal is providing Rs7.5 crore.

The MoU states: “The MoU will promote bilateral co-operation 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 decongest the international border at Raxaul.”