NEPAL's Prime Minister Khadga Prasad Sharma Oli has raised the possibility of two railway lines, one linking three Nepalese cities and another going into China, revealed Chinese Foreign Ministry official Hou Yanqi, Reuters reported.

Ms Hou, Asia Desk deputy chief, said Beijing would encourage Chinese firms to look at the internal railway plan, and that China was already planning to extend the railway from the Tibetan city of Shigatse to Gyirong on the Nepal border.

"Of course, a further extension from Gyirong is an even longer-term plan. It's up to geographic and technical conditions, financing ability. We believe that far in the future the two will countries be connected by rail," she said.

The two countries also signed 10 agreements, including the feasibility plan for a free trade agreement, as well as a concessional loan for a new airport in Nepal's Pokhara and a feasibility study for oil and gas survey projects.

Kathmandu aims to import 33 per cent of the annual demand of 1.8 million tonnes of petroleum products from Beijing, but trade officials say the absence of connectivity over difficult Himalayan terrain poses a challenge to any fuel trade between the two countries