Jade Gas debuted today with a Mongolian coal gas offering to lure ASX investors
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With record gas prices prevalent through much of the northern hemisphere, Jade Gas Holdings (ASX:JGH) – formerly High Grade Metals – couldn’t have picked a better time to return to the ASX with its Mongolian coalbed methane project.
Shares in the company will commence trading today following the successful raising of $7.5m through its initial public offering to fund operations on the TT CBM project in Mongolia’s South Gobi Basin.
The TT CBM project (Jade 60%) is aimed at developing the coal seam gas resources of the Tovan Tolgoi coal field.
Notably, the project area is surrounded by Elixir Energy’s (ASX:EXR) Nomgon IX CBM project where drilling has intersected coals despite not having a defined coal resource.
Elixir also holds a certified best case prospective resource of 14.6 trillion cubic feet of gas.
Jade Gas will operate and manage the TT CBM project under its joint venture with Erdenes Methane (EM), the representative of the Mongolian Government that was awarded the PSA over the area in April 2020.
The company intends to produce gas that will displace the use of imported gas and gas liquids products as well as reducing the use of coal and diesel in the capital of Ulaanbaatar and regional areas.
Executive director Joseph Burke said the TTM CBM project had “enormous potential” in regards to Mongolia’s clean energy transition by reducing air pollution in Ulaanbaatar.
Mongolia has an abundance of coal deposits, making it the subject of significant exploration for coalbed methane (also known as coal seam gas).
Despite this, the landlocked nation is dependent on its neighbours Russia and China for energy supplies, making any CSG development valuable for its energy independence.
The Tovan Tolgoi coal field already hosts a coal resource of about 6 billion tonnes with initial drilling carried out in the second half of 2019, confirming the presence and depths of coal formations within the 20sqkm Borteeg area.
Additionally, RISC Advisory has estimated that the project hosts a gross best case prospective resource of 1Tcf of gas.
Jade Gas plans to improve its understanding of this resource by continuing technical studies and field activities, which will include drilling wells and sampling various coal measures.
As more data is collected, it plans to define a gas resource by establishing a multi-well production pilot to confirm production rates at a commercial level.
Planning for this pilot is expected to start later this year or early 2022 once the data from the 2021 work program is analysed.
The company also has a 66% interest in Baruun Naran Gas, a joint venture operating company formed to explore, develop and seek to produce coal seam gas from a coal mining licence held by joint venture partner Khangad Exploration.