Key Points

The announcement made by Nepal's Prime Minister on Tuesday came ahead of a detailed report on the site of the gas production, which is expected to be published by the end of the year.

Last week, a preliminary study in the area estimated 1.12 billion cubic meters of natural gas in the Dailekh district of Western Nepal, which is yet to be studied in detail.

The Department of Mines and Geology of Nepal made the announcement last week based on a geological survey conducted by the China Geological Survey and exploratory drilling by CNPC Xibu Drilling Engineering Company, a Chinese state-owned firm.

In the initial report, the Chinese state-owned firm had indicated the presence of methane gas at the Jaljale site, with findings suggesting it could supply Nepal's gas demand for the next 50 years.

"The trial production (of methane gas) will start within Mangsir (November), and its commercial production will possibly start within the next fiscal year. It will be utilised fully," the Nepalese Prime Minister announced during Tuesday's parliamentary meeting.

The Chinese company, which previously drilled to a depth of 4,013 meters and extracted a one-meter core sample for laboratory testing, will proceed with further steps only after intergovernmental agreements are in place, officials said on condition of anonymity.

The Chinese team had collected rock samples and transported them to China for further testing to determine the quantity and quality of the methane gas. Based on current estimates, the discovered methane reserves could meet Nepal's energy needs for the next 50 years, marking a potential breakthrough in reducing the country's dependence on petroleum products.

The exploration was initiated under a bilateral agreement signed between the governments of Nepal and China in 2016, aimed at developing petroleum resources.

In 2019, Nepal's Department of Mines and Geology entered into a formal agreement worth NPR 2.4 billion with the China Geological Survey for exploration and drilling work. However, progress was delayed due to several challenges, including the COVID-19 pandemic, transportation issues, road access limitations, and land acquisition disputes.

The three-year agreement, signed in February 2019, was later extended in 2022. Drilling was carried out on 45 ropani (approximately 2.29 hectares) of acquired land in Jaljale by a team of around 70 technicians, while the project also provided employment to about 100 local workers.

Methane (CH4), composed of hydrogen and carbon, is a cleaner-burning fuel compared to petrol or diesel. It is a potent greenhouse gas, formed primarily through the decomposition of organic matter over long periods.

Globally, methane is used as an energy source for heating, electricity generation, and industrial applications. Unlike liquefied petroleum gas (LPG), it cannot be easily compressed into small household cylinders and is typically stored in larger containers.

- ANI