TMK Energy gas flow surge sparks Mongolian energy supply talks

TMK meets with Australian Embassy and Austrade in Mongolia. (From left to right: Leo Zeng, Australian ambassador to Mongolia; Dougal Ferguson, TMK CEO; Brad Reeve, TMK Operations manager; Andrew Berryman, Deputy Head of Mission.)

TMK Energy (ASX: TMK) appears to be steadily earning a top seat at the table in Mongolia’s emerging gas sector, with production continuing to rise at its Gurvantes XXXV coal seam gas project.

As output builds, the company says it’s gearing up for an active 2026 campaign focused on new pilot wells, gas-fired power generation and deeper engagement with a country increasingly desperate for a reliable energy supply.

The latest operations update showed average daily gas production climbed to 663 cubic metres per day in April, up 13 per cent on February and the project’s second-highest monthly rate behind March’s peak, despite the necessary curtailment of LF-07 in late March.

Operationally, the reservoir management plan continues delivering steadily rising gas output and broadly stable water rates, with flagship well LF-07 rebuilding production after a deliberate late-March curtailment designed to protect long-term well performance.

Water output held near 490 barrels per day during April, signalling continued reservoir depressurisation without destabilising the system. Aside from a mechanical pump failure at LF-03 and intermittent regional power outages, the company reported no pump blockages or workovers across the field, helping maintain strong pump uptime and higher water extraction rates.

TMK’s flagship coal seam gas Gurvantes XXXV project spans 8400 square kilometres in Mongolia’s South Gobi Basin, less than 20 kilometres from the Chinese border and near established northern Chinese gas infrastructure.

Thick coal seams extend across 150 kilometres of strike, giving the project genuine basin-scale potential as Mongolia pushes to stabilise chronic energy shortages and reduce dependence on imported electricity.

Alongside its operational update, TMK also wrapped up its third independent technical peer review in April, bringing together current and former management with international coal seam gas specialists to assess the company’s development plans. The review examined the upcoming drilling campaign, reservoir management strategy and a suite of new optimisation initiatives now slated for implementation.

While giving TMK’s current reservoir management strategy a resounding thumbs-up, the review panel also pinpointed a suite of fresh optimisation techniques to spread LF-07’s standout performance across the company’s broader well network and future pilot production holes.

TMK expects to begin drilling new pilot production wells in the third quarter of the year, while fast-tracking its gas utilisation strategy, now elevated to priority status. The initiative is designed to reduce flaring, secure uninterrupted on-site power, supply excess electricity to local users and demonstrate proof of concept to regulators and stakeholders.

The push follows last month’s memorandum of understanding with Mongolian regulator MRPAM, allowing pilot gas to be used for on-site power generation.

TMK says its strategy is to progressively de-risk Gurvantes through steady growth in pilot production and infrastructure integration before moving to bigger field developments.

Our immediate focus is the upcoming pilot well drilling program, as well as the important need to have the beneficial use of gas initiative in place as soon as possible, to not only reduce the flaring of gas, but also to lock in our own permanent power supply for the Pilot Project.   TMK Energy CEO Dougal Ferguson

The company says recent discussions with Mongolian government agencies and private consortia have reinforced the growing role natural gas could play in stabilising the country’s increasingly energy-short power system.

While talks remain preliminary, TMK says the Gurvantes XXXV project is attracting growing political and commercial attention as a potential domestic energy solution, with gas likely to play an important role in Mongolia’s energy mix.

Across Asia, tightening power markets and volatile fuel supply chains are sharpening the focus on cleaner-burning domestic gas resources. And with LF-07 still building momentum beneath Mongolia’s South Gobi sands, TMK is increasingly shifting from exploration hopeful to emerging player in the country’s future energy mix.

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