Jade Gas kicks off Mongolian coal seam gas drilling

Jade Gas has spudded the Red Lake-1 coal seam gas well, the first of six wells it is drilling to improve its understanding of its 1Tcf prospective resource in Mongolia.

Red Lake-1 targets three primary coal seams that will be cored for analysis in the onsite laboratory for gas content.

Drilling is expected to take about 25 days to drill with Jade Gas Holdings (ASX:JGH) also planning to carry out wireline testing and permeability testing in each of the coal seams to assist with future well spacing and development options.

The next well, Red Lake-2, will also be cored, logged while the four remaining wells will be cased for future production testing and used in the 2022 testing and pilot program.

“We are very pleased to have commenced our six well drilling program, which has been designed to initially demonstrate productivity,” executive director Joseph Burke said.

“The team has done an amazing job assembling a robust drilling program which gives us high confidence that it will meet our objectives of validating gas content, determining saturation and composition and measuring permeability.

“We will also look to broaden the area of investigation as we build on the historical work from our 2019 eight-well prospecting program.”

Coal seam gas drilling

The company’s current six-well program targeting the three coal seams follows on its 2019 drill program to evaluate the coal thickness, continuity and undertake a preliminary assessment of the gas content of the deeper Tavan Tolgoi coals in the area.

This earlier program had generated an extensive dataset that also led to Jade adding an appraisal focus to its new wells.

It comes amidst growing demand for gas in cleaner energy solutions in Mongolia. Natural gas continues to be seen as the transition fuel to greater use of renewables by developing economies around the world, and Mongolia will benefit greatly from the future displacement of the dominant coal fired power plants with cleaner energy produced from natural gas.

More broadly in the region, during 2021, China has added focus to both domestic onshore and offshore gas production, and as well as China countries like Japan and South Korea have increased imports of pipeline gas and LNG.

This article was developed in collaboration with Jade Gas, 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.