Massive natural gas reserve discovered in Nepal: 112 billion cubic meters found in Dailekh

KATHMANDU: In a potentially game-changing breakthrough for Nepal’s energy sector, 112 billion cubic meters of natural gas have been discovered in Dailekh, according to a preliminary report by a Chinese geological team. This natural gas reserve, primarily composed of methane, could meet Nepal’s domestic energy needs for up to 50 years, officials say, creating new opportunities in clean energy, green hydrogen production, and energy security.

The initial study was conducted by China Geological Survey in partnership with CNPC Xibu Engineering Company, which began drilling in Jaljale, Dailekh on May 11, 2023. The exploration involved drilling 4,000 meters deep, after which a distinct odor of methane was detected. Rock samples were then taken to China for further analysis to assess the quality and commercial viability of the natural gas in Nepal.

“This is methane gas—an alternative to petrol and diesel,” confirmed Prakash Luintel, Spokesperson at the Petroleum Exploration Project under Nepal’s Department of Mines and Geology. “Methane gas can be used to run vehicles, generate electricity, and provide household lighting. More importantly, we can extract hydrogen and ammonia from it, which is essential for producing chemical fertilizers.”

The discovery is being hailed as a milestone in Nepal’s quest for clean energy and sustainable economic growth. Minister for Industry, Commerce, and Supplies Damodar Bhandari emphasized the potential impact: “The gas reserves discovered could be a foundation for long-term energy independence. Once the detailed report arrives from China, we plan to begin test production within 75 days, with an estimated investment of NPR 65 billion.”

From Sacred Fire to Scientific Breakthrough

For decades, locals in Dailekh witnessed flames emerging from the ground, believing them to be divine manifestations. Experts now confirm these were due to flammable natural gases seeping from underground, likely connected to this large-scale methane deposit.

Luintel also revealed that three more drill sites are planned in Dailekh to explore further reserves. “The quantity may be even higher once we complete exploration in all identified blocks,” he added.

Strategic Shift Since India’s Blockade

Nepal’s interest in petroleum exploration and natural gas reserves intensified after the Indian blockade of 2015, which disrupted fuel imports. In response, the government led by K.P. Sharma Oli invited China to study Nepal’s energy potential. Since then, Chinese teams have surveyed multiple locations across Nepal.

While Nepal’s structured petroleum exploration began only in 1997, an earlier airborne magnetic survey in 1978–79 had already indicated significant underground hydrocarbon potential across the Terai and Siwalik regions. The Petroleum Exploration Promotion Project, initiated in 1982, mapped out 10 potential exploration blocks, with Dailekh now emerging as the most promising.

A Turning Point for Nepal’s Energy Sector

If Nepal successfully harnesses these natural gas reserves for commercial energy use, it could significantly reduce dependency on fuel imports from India, enhance foreign direct investment (FDI) in the energy sector, and support green industrialization.

Energy analysts suggest that this could place Nepal on the map of emerging energy markets and serve as a model for sustainable development in South Asia. Furthermore, methane-derived green hydrogen and ammonia-based fertilizer production could strengthen Nepal’s agricultural economy.

Nepal currently spends billions annually on imported fossil fuels. Harnessing domestic methane gas could not only ease the fuel trade deficit, but also create thousands of new jobs and reduce carbon emissions, aligning with Nepal’s climate commitments.

As the government awaits the detailed exploration report due in December 2025, the discovery in Dailekh is being seen as a beacon of opportunity—a step toward a cleaner, self-reliant, and economically stronger Nepal.