Nepal is set to begin commercial production of methane gas in its western region by the next fiscal year, Prime Minister KP Sharma Oli announced Tuesday. The development comes as further studies in the region remain ongoing.
The announcement was made ahead of a detailed site report, expected to be released by the end of this year. Preliminary findings from a recent study suggest the Dailekh district in western Nepal holds around 1.12 billion cubic meters of natural gas, although more in-depth analysis is yet to be conducted.
The Department of Mines and Geology confirmed the estimate last week, citing data from a geological survey carried out by the China Geological Survey and exploratory drilling performed by CNPC Xibu Drilling Engineering Company, a Chinese state-owned enterprise.
Initial studies pointed to methane gas reserves at the Jaljale site. The findings suggest the potential to meet Nepal’s domestic gas demand for the next five decades.
“Trial production will begin within Mangsir (November), and we expect to launch commercial production by the next fiscal year. The gas will be fully utilized,” Prime Minister Oli stated during a session of parliament.
According to officials, further steps by the Chinese firm— which has already drilled to a depth of 4,013 meters and collected a one-meter core sample for testing— will proceed only after relevant intergovernmental agreements are signed.
Rock samples extracted during the drilling phase were sent to China for laboratory analysis to better assess the volume and quality of the methane deposits. If proven viable, the discovery could significantly reduce Nepal’s dependence on imported petroleum products.
The exploration project stems from a bilateral agreement between Nepal and China signed in 2016 to promote petroleum resource development. In 2019, Nepal’s Department of Mines and Geology entered a NPR 2.4 billion contract with the China Geological Survey for drilling and survey work.
Although the original three-year agreement was signed in early 2019, various obstacles—including the COVID-19 pandemic, logistical issues, limited road access, and land acquisition delays—slowed progress. The agreement was eventually extended in 2022.
Drilling was conducted on 45 ropani (around 2.29 hectares) of land in Jaljale by a team of roughly 70 technicians, with about 100 local residents employed during the process.
Methane (CH₄), made of hydrogen and carbon, is considered a cleaner-burning alternative to fossil fuels like petrol and diesel. However, it is also a potent greenhouse gas. It forms naturally through the long-term decomposition of organic matter.
Globally, methane is widely used for heating, electricity generation, and industrial applications. Unlike liquefied petroleum gas (LPG), it cannot be easily stored in small household cylinders and typically requires larger containers for storage.
