TMK Energy gears up for first Mongolian gas production

TMK Energy has successfully drilled and completed three new coal seam gas pilot production wells at its Gurvantes XXXV project, readying itself to be the first producer of coal seam gas (CSG) in Mongolia and bringing its entire 2024 work program in on schedule and within budget.

The wells are set to double the production capacity of the Lucky Fox area of its leases, joining the existing three wells drilled earlier in the year.

The final steps, including the connection, calibration and testing of production metering controls are nearing completion with the wells running on idle speed to prevent reservoir damage.

Once the final checks and measures have been done the company expects to have the six pilot production wells online by the end of the month. The move will double the field’s pumping capacity and hasten the process of hitting the critical desorption pressure needed to maximise gas production rates without prematurely draining the field.

In line with the company’s reservoir management strategy, the new wells will be brought into operation gradually across six to eight weeks to ensure a controlled and sustainable ramp-up. Full pumping capacity is anticipated by early next year, paving the way for increased output while safeguarding the reservoir’s long-term integrity.

By the first quarter of 2025, TMK expects to begin periodic monitoring of pressure drops in the reservoir, a key indicator of the field’s performance and a crucial step in optimising production.

MK Energy chief executive officer Dougal Ferguson TMK is now the clear leader in the CSG industry in Mongolia and the Company most likely to be the first in the race to demonstrate the commercial potential of CSG in Mongolia and the enormous resources that exist in our Project area.

TMK’s flagship Gurvantes XXXV CSG project covers 8400 square kilometres in the South Gobi Basin in Mongolia, a region notable for its massive coal deposits, making it the perfect spot for CSG exploration. The company now holds 100 per cent of the project having picked up the remaining balance of 33 per cent off ASX-listed Talon Energy in 2023.

With an estimated contingent (2C) resource of 1.2 trillion cubic feet (Tcf), the company regards Gurvantes as Mongolia’s largest gas deposit. Its strategic location near China’s northern gas pipelines positions would make TMK a significant potential contributor to the region’s transition away from coal, supporting cleaner energy solutions.

In addition to its Mongolian assets, in 2021 TMK acquired - from a private vendor - a 20 per cent interest in the Talisman Deep project, which contains the Napoleon structure in WA’s Barrow-Dampier sub-basin.

Viewed by the company as a similar structure to the nearby Santos-owned Dorado discovery with an estimated resource of 150 million barrels of oil equivalent (boe) and Jadestone Energy’s neighbouring Wanaea fields, the Napoleon target sits in relatively shallow waters less than 100m deep and has a P50 prospective recoverable resource of 120m boe.

TMK has invested significant time, money and resources into bringing its Mongolian CSG assets onstream. The next two months could mark a milestone in the company’s history, as it goes from oil and gas explorer to gas producer - thus generating revenue to fund future growth.

It will also make a major point in Mongolia’s evolution as it starts to move away from an energy grid heavily reliant of coal, towards a much more environmentally-friendly electricity network fuelled, in part, by its own domestic and much cleaner gas supply.

Is your ASX-listed company doing something interesting? Contact: matt.birney@wanews.com.au