Preliminary Study Uncovers Over 1.12 Billion Cubic Metres of Natural Gas in Dailekh, Nepal: A Major Step Toward Energy Independence

Dailekh, Nepal — June 19, 2025 — In what could be a landmark moment for Nepal’s energy future, a preliminary geological study has revealed the presence of an estimated 1.12 billion cubic metres of natural gas in the hilly district of Dailekh in western Nepal. The discovery, if confirmed through further testing, could mark a significant shift in Nepal’s reliance on imported fossil fuels and open the door for long-term domestic energy production.

The exploration project was carried out jointly by the China Geological Survey and CNPC Xibu Drilling Engineering Company Limited, a Chinese state-owned enterprise, under the coordination and oversight of Nepal’s Department of Mines and Geology. The effort was part of a broader initiative to explore the country’s potential for petroleum and gas reserves, with Dailekh being one of the few regions in Nepal identified decades ago as geologically favorable for hydrocarbons.

Major Methane Presence Detected

According to officials, exploratory drilling at the Jaljale site in Dailekh reached a depth of 4,013 metres. Core samples were extracted at regular intervals and sent for detailed laboratory analysis. Early results indicate a significant concentration of methane gas in the rock layers, suggesting that the site may hold commercially viable quantities of natural gas.

“This is a very promising development,” said Dinesh Kumar Napit, Deputy Director General of the Department of Mines and Geology. “The presence of methane in such large volume is encouraging. Based on our initial estimates, the gas reserve discovered could potentially meet Nepal’s current gas demand for the next 50 years.”

Testing, Analysis, and Next Steps

Chinese geologists involved in the project have taken rock and gas samples back to China for advanced laboratory testing to determine the exact volume, quality, and extractability of the natural gas. These tests will help assess whether the reserve is suitable for commercial extraction and sustainable production.

The findings are still in the preliminary phase. A final comprehensive report detailing the volume estimates, geological composition, economic feasibility, and recommended extraction techniques is expected to be released by December 2025.

“Initially, the exploration in Dailekh was aimed at identifying petroleum reserves, based on seismic surveys and prior data from the 1980s,” Napit said. “While no significant oil reserve was found, the discovery of natural gas in such a quantity is still an extremely positive outcome.”

A Long-Awaited Development

Interest in Dailekh as a potential energy site dates back more than three decades. In the 1980s, early studies conducted with assistance from international agencies had indicated that Nepal’s Mid-Western and Far-Western regions might hold petroleum potential. However, due to political instability, lack of infrastructure, and limited funding, systematic drilling and exploration were delayed.

With energy consumption steadily increasing and Nepal largely dependent on imports for fossil fuels—including liquefied petroleum gas (LPG) for cooking and heating—this recent breakthrough could pave the way for a more self-reliant energy future.

Intergovernmental Cooperation Required

While the discovery is promising, the road to commercial production will be complex. Napit emphasized that any future development of the gas field will require formal intergovernmental agreements between Nepal and China, especially considering that the exploration and testing have been conducted with Chinese technical support.

Such agreements would need to address not only the financial and technical terms of drilling and production but also long-term sharing of profits, environmental standards, transportation infrastructure, and capacity-building of Nepali institutions.

Energy Security and Economic Potential

Experts believe that if confirmed and managed properly, the natural gas reserve could significantly reduce Nepal’s dependency on imported LPG and fossil fuels, bring in foreign investment, and boost local employment and infrastructure in the Dailekh region.

“This could be a turning point for Nepal,” said an energy analyst based in Kathmandu. “However, the government must proceed cautiously, ensuring that environmental safeguards are in place and that any bilateral agreements protect Nepal’s sovereignty and long-term national interest.”

As the country awaits the final analysis later this year, the discovery has already sparked renewed optimism about the prospects of unlocking Nepal’s natural resources for sustainable development and energy independence.