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All gassed up: TMK Energy wells flowing in Mongolian Gobi Basin

Updated: Apr 19

TMK Energy’s exploration site in Mongolia. Credit: File

TMK Energy says gas is flowing in line with its expectations from the continued production of three pilot holes in its world-class Gurvantes XXXV joint venture (JV) project at Narrin Sukhait in southern Mongolia’s South Gobi Basin.

Some 100km east and along strike from the coal seam gas (CSG) project it shares in a 67:33 JV with Talon Energy, a joint exploration program of wildcat drilling and 2D seismic it operates with Australian coal miner Terra Energy has also turned up 45m of gaseous coal. TMK and Terra each own a 50 per cent share.

TMK says all three of its vertical pilot holes at Gurvantes continue to produce unstimulated gas to surface from extensive coal seams, with the rate increasing as dewatering occurs and reservoir pressure decreases.

But it encountered some difficulty with pilot hole Lucky Fox-3, which failed initially to live up to its name when it was plagued by pump shutdowns believed to be caused by coal fines in water. But the problem was remedied with a workover.

The company says it is yet to define ultimate gas rates in the early stages of production and that six months of testing is required to gather data robust enough to be able to model gas delivery rates and a production profile for a prefeasibility study for development.

The JV’s world-class deposit currently boasts at a best-estimate (2C) contingent resource of 1.2 trillion cubic feet of high-methane gas, which is the biggest CSG resource in Mongolia. The resource has many natural features that skew it towards commercialisation, including the average net thickness of the coal seams (90m), high estimated gas content of the bituminous coals (33 billion cubic feet per square kilometre) and the potential to augment the resources from the vastly unexplored remainder of the 8400sq km permit.

The primary focus of the Company at present is to continue to keep the three pilot wells running as near to 100% of the time as possible with the aim of establishing gas flow rates to demonstrate commerciality. What is most significant is that we have intersected thick gassy coals seams in both the west of the Gurvantes project and now the eastern portion, in what is interpreted to be the same geological formation, approximately 100km apart. TMK Energy chief executive officer Brendan Stats

Terra Energy executive director Matthew Crawford said the JV would expand its exploration activities next year as it was yet to explore a substantial resources area for CSG.

The new exploration venture between TMK and Terra discovered the 45m of gaseous coal in one of three holes drilled to date, bearing testimony to the upside CSG potential of the huge permit. The JV’s two-year exploration cooperation agreement will see the companies evenly split the cost of a total of seven wells to be completed this year and the acquisition of 40km of 2D seismic data to be finalised this month.

Terra is the owner-operator of the nearby Baruun Noyon Uul coal mine. Management of both companies say they will benefit from the significant overlap in the geological data collected from drilling and exploration activities.

TMK has signed an energy offtake agreement last March with Mongol Alt LLC (MAK), which operates a nearby coal mine, for power generation and to pipe production water to its mine.

It would seem the project contains all the essential ingredients to be able to bake the CSG cake and satisfy the hungry consumers domestically and within China’s massive energy market, with the West-East Chinese gas pipeline beckoning to be fed 300km to the south.

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