TMK expects to start drilling at its Gurvantes XXXV coal seam gas (CSG) project in Mongolia’s South Gobi Basin in March after awarding the key drill contract.
Contractor Ellehcor Drilling Services will drill at least four fully-tested core holes within the western portion of the licence area in the Nariin Sukhait that hosts a number of active, open-cut coal mining operations.
Nariin Sukhait is known to contain two very thick, high-quality coal seams that have high gas content according to records from five historical wells, making it a priority target for TMK Energy (ASX:TMK).
These historical wells were not fully tested using modern CSG techniques and the company’s drill program will provide the data required to fully assess the commercial potential of the previously identified CSG resource.
It also marks the first step in converting the prospective resource of just under 6 trillion cubic feet of gas into a more certain prospective resource.
That the drill program is funded by partner Talon Energy (ASX:TPD) under an existing farm-in agreement is just icing on the cake.
“With all approvals in place and all contractors engaged, we are looking forward to commencing our maiden drilling program in early March and taking a significant step forward in our goal to deliver a world class CSG project right next door to China, the largest growing gas market in the world,” chief executive officer Brendan Stats said.
Coal seam gas on China’s doorstep
TMK had just completed its acquisition of Gurvantes XXXV earlier this month.
The project hosts multiple very thick, high-quality coal seams which outcrop at the surface and extend along an east-west strike.
Preliminary CSG exploration completed in 2004-2005 confirmed the high-gas content of the coal and other critical coal parameters needed for a successful CSG project.
Importantly, it is close to the extensive Northern China gas transmission and distribution network and is close to several large-scale mining operations with high energy needs.
This article was developed in collaboration with TMK Energy, 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.