KATHMANDU, Aug 14: Although preliminary studies indicate that Dailekh has 11.2 billion cubic meters of natural gas, there is still confusion over how to further extract and commercially produce it. A team of Chinese experts conducted exploration in Bhairabi Rural Municipality–1, Jaljale, Dailekh, and the initial report suggested that the natural gas could last for 50 years.
Based on the assumption of petroleum presence, the study was conducted by a team of Chinese experts in coordination with the Department of Mines and Geology (DMG). Even though Dailekh is estimated to have natural gas reserves sufficient for 50 years, the government has yet to assign any agency the responsibility for further study, research, extraction, or commercialization.
The government has also not prepared a concrete plan. Since Nepal is currently importing gas from abroad while a significant quantity has been confirmed domestically, DMG’s Information Officer Dr. Mukunda Bhattarai emphasizes the need to utilize this resource. However, no decision has been made regarding which agency will lead further studies and production.
Stakeholders suggest that the expertise of Nepal Oil Corporation (NOC), a state-owned enterprise established to trade fuels, should be used for further studies of the gas. Former Chief Secretary Baikuntha Aryal of the Nepal Government also stresses that the government should consider commercial production of the gas. “Given their work in the fuel sector, it might be easier for Nepal Oil Corporation to handle this,” Aryal said. “The government needs to decide how to proceed.”
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NOC currently imports the fuel required in Nepal from Indian Oil Corporation (IOC) and handles its sales and distribution. The NOC has also stated that it is ready to take responsibility if assigned. Managing Director Dr. Chandika Prasad Bhatta highlighted the need for detailed study and proper utilization of the gas discovered. “The corporation has expertise in fuel trade,” Bhatta said. “Being a state-owned company, it is also our responsibility.”
He added that the expertise of IOC, a partner in the fuel trade, could also be utilized. He emphasized the necessity of making a final decision on whether commercial production is feasible.
In Dailekh, drilling for gas was conducted to a depth of around 4,013 meters. If this gas can be commercially exploited, it could make a significant contribution to the country’s economy. Studies show that one site holds 11.2 billion cubic meters of gas, and there are three additional storage locations.
In 2015, discussions about alternatives to petroleum began after India imposed a blockade. Subsequently, the government requested China to study petroleum and gas resources. The Chinese team, including experts, began exploration in 2019.
The NOC Independent Employees’ Union has also drawn attention to the responsibility of extracting and commercializing natural methane gas. A team led by Union President Bikas Bakhati submitted a seven-point memorandum to MD Bhatta, urging action to ensure the extraction and marketing of Dailekh gas through domestic investment and, if necessary, strategic partners or a subsidiary of the corporation.
Bakhati emphasized the immediate need to form a committee to identify potential areas for methane gas use and develop a market strategy. “Using the technical workforce, infrastructure, and experience of the corporation, a phased plan must be devised for gas extraction, processing, and marketing,” he said. “Natural methane gas should be extracted, processed, and marketed.”
Union General Secretary Sandeep Baral highlighted that natural methane gas should be promoted as a key pillar of clean energy initiatives. “A subsidiary of the corporation or a corporation-owned subsidiary with strategic partners should be established to produce, process, transport, and distribute methane gas,” he said.
The union noted that if the corporation does not adopt policies in line with the changing global energy landscape, its service continuity could face challenges in the coming years.
Since some gas has also been found in the Kathmandu Valley, the union has urged the corporation to seriously consider exploration, extraction, and study there as well. Currently, LP gas required for cooking and some industrial purposes in Nepal is entirely imported from India through NOC.
