Works afoot for commercial production of methane gas

By Kamal Sharma 

Dailekh, Sept. 3: A formal process aimed at commercial production of methane gas in Dailekh has finally begun. 

A technical team from Nepal Oil Corporation (NOC) has arrived in Jaljale, Bhairabi Rural Municipality–1 of Dailekh district, to conduct a feasibility study for the purpose.  This follows the preliminary confirmation that the area has approximately 112 billion cubic metres of methane gas reserves.

A four-member committee was recently formed under the leadership of Binita Mani Upadhyay, Director of the Engineering Projects Department at Nepal Oil Corporation. 

The committee was assigned by the Ministry of Industry, Commerce and Supplies to study the economic, technical, and legal aspects of production, refining, and transportation of petroleum products.

According to the NOC, the team aims to assess the feasibility of test production, refining processes, and potential uses of methane gas. The team is expected to submit a detailed report to the Government of Nepal within a month.

The expert delegation includes geologist Dharma Raj Khadka from the Department of Mines and Geology, Manish Karna from the Petroleum Exploration Project, chemical engineer Deepti Paudel, and mechanical engineer Bhakta Bhandari from the NOC.

Spokesperson for the Department of Mines and Geology, Khadka, confirmed the presence of natural methane gas as per the preliminary report by China's Geological Survey. 

He added that the current study focuses on evaluating how to proceed with production, refining, and optimal utilisation of the gas. “Once the final report is received, we will move towards detailed designs, plant planning, transportation, and distribution infrastructure,” said Khadka.

The team is also investigating the feasibility of using the gas for fertiliser production, CNG (Compressed Natural Gas) and LPG (Liquefied Petroleum Gas). The committee will prepare policy and technical recommendations.

The Department of Mines and Geology has said that they have requested China, which has been assisting in petroleum exploration, also to support the production phase with both technical and financial assistance. 

However, according to Director General Dinesh Kumar Napit, a response to the government's formal request is still awaited. “We sent the letter around two months ago. The Chinese side has not responded yet. However, they have committed to submitting the final report by December this year,” he said.

The preliminary report confirming the presence of 112 billion cubic metres of methane gas was submitted by a Chinese state-owned company after conducting exploration in Jaljale. 

Encouraged by this development, the government has begun preparatory work for test production. Following the report’s submission, Prime Minister KP Sharma Oli instructed the concerned agencies to complete all preparatory works for test production by the end of November.

The petroleum exploration project was initiated under full Chinese government grant assistance and is being executed in three phases, a detailed feasibility study, drilling, and data analysis. 

Drilling in Jaljale began on May 10, 2024, and continued until December 2024, reaching a depth of 4,013 metres.

The petroleum cooperation between Nepal and China was formalised during Prime Minister Oli’s official visit to China in March 2016, when a G2G bilateral agreement was signed to support exploration activities. 

Based on this agreement, the government of Nepal formally approved a project to allow China to carry out detailed exploration in Dailekh in February 2019.

A formal MoU between the Department of Mines and Geology and the China Geological Survey was signed in 2020. The federal government has also approved the acquisition of 45 ropanis of land for petroleum exploration activities.