Jade Gas is preparing to kick off a six-well drilling program at its flagship TT CBM gas project in the South Gobi Basin in Mongolia this month.

The drilling program is fundamental to the company’s obligations under the CBM exploration plan for Year 1 that was approved by the Mongolian regulator – the Mineral Resources and Petroleum Authority of Mongolia (MRPAM) – earlier in the year.

The program builds on the eight-well program undertaken while Jade Gas (ASX:JGH) was private in 2019, and is designed to:

  • Extend area of investigation, validate gas content, evaluate gas saturation and measure coal seam permeability; and
  • Allow for four of the six wells to be cased for extended production testing and monitoring in CY2022.

And with natural gas prices at record levels across Asia and Europe, it’s great timing and strong market conditions for the company to get drilling underway.

Four wells for extended gas flow monitoring

The company has shipped various items of high-tech equipment to Mongolia, including desorption equipment for the mobile lab, sophisticated downhole logging tools, and drill stem testing equipment.

A programmed series of permeability tests will also be carried out using this equipment, and up to four wells are to be cased for subsequent completion later in CY2022 to obtain longer term production information.

“We are delighted to commence a six-well program this month,” Jade executive director Joseph Burke said.

“Importantly, this does three things: 1. Builds on our eight-well program we completed in CY2019 that established the TT CBM Project had substantial development potential;

“2. Provides for up to four wells we can use for extended testing and monitoring of gas flow into CY2022; and

“3. Demonstrates to the Mongolian Government that we are dedicated to progressing the TT CBM Project in a methodical, safe and expeditious manner with a view to supporting cleaner energy options for the country.”

Jade Gas TT CBM Project
Pic: Location of the TT CBM gas project in the South Gobi Basin in Mongolia.

Strong market conditions amidst regional energy shortages

With growing momentum around the world toward the shift to cleaner fuels, prices for natural gas are at record levels, especially in Asia, with shortages of both gas and oil products in many countries beginning to impact economic growth outlooks.

Forecast shortage of supply for the forthcoming winter has seen China’s central government instructing the country’s state-owned energy companies to secure supplies – including gas – at all costs.

And many European energy companies are also seeking greater supplies of thermal coal from Russia and elsewhere amidst record prices for thermal coal futures.

Jade says these market conditions provide a positive backdrop as it advances its TT CBM project.

With several international companies now, or soon to be, active in the South Gobi region, the availability and capability of the services sector is strong, and Jade is confident it will be able to carry out its work program as planned.

“Jade is also aligned with Mongolia’s and global trends toward decarbonization of the planet” said Mr. Burke.   “The Company, along with Erdenes Methane LLC, our partner and representative of the Mongolian Government, see enormous potential for our TT CBM Project with respect to Mongolia’s clean energy transition, ultimately contributing to reducing air pollution in the capital city of Ulaanbaatar.”




This article was developed in collaboration with Jade Gas Holdings, a Stockhead advertiser at the time of publishing.


This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.