Kathmandu: Nepal Oil Corporation (NOC) has been urged to take ownership of the commercial production of methane gas recently discovered in Dailekh district.
On Tuesday, the Corporation’s Independent Employees’ Union submitted a seven-point memorandum to NOC Executive Director Chandika Bhatt, requesting the corporation to secure rights over the methane gas found in Jaljale, Bhairavi Rural Municipality, during petroleum exploration. The memorandum was handed over by a delegation led by Union President Bikash Bakhati.
According to the initial exploration report, which has already been submitted to the government, Dailekh holds confirmed reserves of 112 billion cubic metres of natural methane gas, with projections suggesting total reserves could reach 430 billion cubic metres in the area. The report indicates that this quantity could meet Nepal’s energy needs for at least 50 years.
Currently, Nepal imports all of its liquefied petroleum (LP) gas from India, primarily for cooking and some industrial use, through the NOC. This dependence results in billions of rupees flowing out of the country annually and contributes significantly to Nepal’s trade deficit.
The NOC also incurs heavy annual losses in LP gas operations. Against this backdrop, the union has called on the corporation to take direct ownership of methane gas production in Dailekh.
The union noted that the corporation’s mandate already includes exploring and operating potential oil and gas fields. It suggested that the NOC could either take sole ownership or establish a company in partnership with strategic investors to extract and commercially trade the gas.
The memorandum proposes that the NOC, as a fully state-owned entity, would be the most suitable body to lead methane gas extraction and commercialization. It urged the corporation to coordinate with the government to ensure that production and marketing are carried out under NOC ownership, either through direct investment, partnerships, or via a subsidiary.
The union has also demanded the formation of an immediate committee to identify possible uses for methane gas, develop a market strategy, and prepare a phased action plan for extraction, processing, and marketing. The plan should utilize the corporation’s existing technical workforce, infrastructure, and experience.
Furthermore, the union has called on NOC to launch a comprehensive technical, financial, legal, and commercial feasibility study for methane gas production. It has also recommended establishing a dedicated subsidiary—wholly owned by NOC or in partnership with strategic allies—to manage production, processing, transportation, and distribution. Methane gas, it suggested, should be positioned as a cornerstone of Nepal’s clean energy transition.
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