KATHMANDU, June 20, 2025 (BSS/AFP) - Nepal's Prime Minister KP Sharma Oli welcomed as "good news" on Friday the discovery of large methane gas reserves in the Himalayan nation in a joint study with China.

"The news that there are 112 billion cubic metres of gas... is good news," Oli said in a Facebook post.

The Department of Mines and Geology said the gas was discovered in the western district of Dailekh.

"This is an initial estimate. Lab tests of the samples will give more information on the characteristics of the reserve," Prakash Luitel, a geologist at the department, told AFP.

The study was conducted with the government-run China Geological Survey.

"The final report is expected in December. We will then get better information for the next stage," said the mines and geology department's spokesman Mukunda Bhattarai.

He said drilling was done at a depth of up to 4,013 metres (13,166 feet).

Petroleum products remain landlocked Nepal's top import despite Kathmandu boosting energy production in recent years through a dam-building spree.

Nepal spent more than $1.5 billion on petroleum products over the past 10 months, accounting for nearly 16 percent of total imports, according to central bank data.