Massive 80.7 billion cubic meters natural gas reserve confirmed in Dailekh, Nepal

KATHMANDU: In a major development for Nepal’s energy security and South Asia’s emerging hydrocarbon landscape, the government has confirmed the discovery of an estimated 80.7 billion cubic meters (BCM) of natural gas reserves in Jaljale, Bhairavi Rural Municipality–1, Dailekh district.

According to the final exploration report submitted by the China Geological Survey (CGS) to the Government of Nepal, the confirmed reserve size significantly exceeds earlier projections. The Department of Mines and Geology (DMG) revealed that initial preliminary studies had estimated just 1.12 billion cubic meters, but advanced seismic and geological analysis now confirms a much larger deposit.

Nepal’s Largest Confirmed Natural Gas Reserve

DMG spokesperson Dharmaraj Khadka stated that the updated figure was determined following detailed exploration by the Chinese technical team.

“This confirms the size of the gas reserve. However, the exact commercially recoverable quantity will only be determined after well testing,” Khadka said.

The discovery positions Nepal on the global natural gas map, potentially transforming the country’s long-term energy strategy, reducing dependence on imported petroleum products, and strengthening domestic industrial capacity.

What Happens Next: Well Testing and Commercial Viability

Despite confirmation of the reserve size, commercial production is not yet guaranteed. Experts stress that “well testing” is the next critical phase to determine:

• Recoverable gas volume
• Extraction technology requirements
• Flow rate and pressure conditions
• Commercial feasibility

Officials explained that advanced drilling tools will be deployed to fracture rock formations or displace trapped gas. The extracted samples will undergo laboratory analysis to assess chemical composition and energy value before commercial extraction decisions are made.

Type of Gas: Shale or Tight Gas?

Energy experts suggest the Dailekh gas resembles shale gas or tight gas, similar to unconventional natural gas extracted in the United States. This type of gas is trapped within rock layers and requires advanced extraction techniques such as hydraulic fracturing.

Such reserves are technically challenging and capital-intensive to develop, but if commercially viable, they could significantly reduce Nepal’s annual energy import bill, which remains heavily dependent on fossil fuel imports from India.

China–Nepal Energy Cooperation

The petroleum exploration project was conducted under a financial and technical assistance agreement worth Rs 2.40 billion between the Government of Nepal and the China Geological Survey.

Under the agreement, the Chinese team completed:

• Seismic surveys
• Geological surveys
• Magnetotelluric surveys
• Geochemical surveys

The Department of Mines and Geology is currently reviewing the final report in detail. The Nepal government has also requested additional grant assistance from China to complete remaining technical phases.

Strategic Energy Implications for Nepal

The confirmation of 80.7 BCM of gas could mark a turning point for Nepal’s energy economy. For comparison, even partial commercial production could:

• Support domestic fertilizer plants
• Power gas-based electricity generation
• Supply industrial manufacturing
• Reduce trade deficit pressures
• Strengthen Nepal’s energy independence

Nepal currently imports nearly all its fossil fuels, contributing significantly to the country’s widening trade imbalance.

Historical Gas Indicators in Dailekh

Dailekh has long been known for natural gas seepage sites, including Shristhan, Navisthan, Paduka, and Lower Dungeshwor, where natural flames have reportedly burned for centuries. These geological indicators prompted formal exploration beginning in October 2019 (Ashoj 2076 BS).

The discovery has now become a major political and economic talking point ahead of upcoming local elections in the district, with political parties placing gas extraction at the center of their development agenda.

Global Energy Context

As global energy markets shift toward diversified energy security strategies amid geopolitical instability and climate transition policies, Nepal’s potential entry into the natural gas production sector carries regional importance.

While natural gas is considered a transitional fuel in the global energy transition framework, it remains critical for industrialization and economic growth in developing countries.

If commercial production proves feasible, Dailekh’s gas field could become one of South Asia’s most significant new energy developments in recent years.

Further technical evaluation and international investment partnerships will determine whether this confirmed reserve translates into a fully operational natural gas production industry in Nepal.