TMK flags April start to pilot production program at Gurvantes XXXV

TMK’s planned production pilot at its Gurvantes XXXV coal seam gas project in Mongolia is poised to begin in April after a contract was signed with a major international drilling contractor.

Drilling of the three production wells will begin following the completion of site works and the import of long lead items which have been ordered and are in transit to Mongolia.

TMK Energy (ASX:TMX) added that results from the successful Snow Leopard-2 exploration well, which the three production wells will be located close to, have been integrated into modelling work undertaken by SLB (previously known as Schlumberger).

This work has predicted early gas breakthrough and relatively high production rates when compared to coal seam gas wells globally, giving the company a strong degree of confidence that the pilot program will be successful in delivering a “proof of concept” and gas flow to surface.

Adding further interest, partner Talon Energy (ASX:TPD) has committed to funding 100% of costs for the three production wells to a cap of US$3.15m under the second stage of its farm-in, which will grant it a 33% stake in the project.

“We are pleased to be at the stage of commencing what we believe will be a transformational period for the company, starting with the much anticipated “proof of concept” Pilot Well Program, to be followed by a planned 2023 exploration program,” chief executive officer Brendan Stats said.

“In 2022 we certified a large gas resource (1.2 TCF 2C Contingent Resource) and the aim of the 2023 Pilot Well Program is to demonstrate that this resource can produce gas to surface at commercial rates.

“The company is well placed to take advantage of the significant requirement for reliable long term energy supply in the region, particularly with China now opening up its borders.”

Pilot program

The pilot program is expected to take about eight weeks to complete drilling of the three production wells and install pumps.

These will then be tied into the surface facilities, which includes metering skids, a flare stack and water disposal facilities, and then placed on pump to commence the process of pressure drawdown prior to gas breakout.

Once commissioned, the pilot wells will be operated for about six months in order to understand the water and gas production profiles.

Work is also underway to determine if there is an economical and environmentally sensible way to utilise the gas produced to surface during the early stages of the production test rather than flaring the gas.

Possible uses could include generating power for the Gurvantes Project or generating power for the local coal mining operations, displacing the more traditional diesel-fired power generation.

This article was developed in collaboration with TMK Energy (ASX:TMK), 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.