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TMK ramps up Mongolian gas pilot production

Updated: Apr 24

TMK Energy’s Lucky Fox-2 pilot well in Mongolia. Credit: File.

Increasing gas flow rates from TMK Energy’s Gurvantes XXXV pilot wells in Mongolia, peaking at 13,000 standard cubic feet per day last month, take the project one step closer to commercial performance.

Management says total gas produced has doubled month-on-month after the initial flush production period in August this year and during November proved to be enough to sustain a gas flare due to an impressive 98 per cent gas flow uptime.

The three vertical production wells at Gurvantes XXXV – Lucky Fox-1, 2 and 3 – penetrate coal seams charged with natural methane gas. TMK says they contain a best-estimate (2C) contingent resource of 1.2 trillion cubic feet, the biggest coal seam gas resource in Mongolia.

In July this year, the pilot wells were brought online and produced 2.4 thousand standard cubic feet (mscf) of gas. In August, the total volume produced for the month increased significantly to 72.7mscf following an initial flush production period.

September and October saw the wells produce less gas due to downtime after the Lucky Fox-3 well pumps became blocked with coal fines. Those months accounted for 30.7mscf and 60.1mscf of gas production, respectively.

During the month of November, there were no issues with pumps and the wells boasted a 98 per cent “up-rate” contributing to a significant ramp-up of monthly production. The wells produced 130.5mscf for November, with flow rates peaking at 13mscf per day on November 30, about a 360 per cent increase over the highest daily rate measured in the previous month.

Water production averaged 496 barrels per day for November and the company says the levels are gradually decreasing, which is an indicator of good coal reservoir permeability and connectivity.

The performance of the pilot production wells, and the extended production test, continues to meet our expectations and the increasing gas rates coupled with continued good water rates are positive indicators that the reservoir is not only producing gas, but is still in the process of being depressurised, both critical elements of a successful coal seam gas pilot production test. It is also pleasing that we are now one step closer to consolidating 100% of the Gurvantes XXXV Project within TMK and we look forward to completing the acquisition at the end of this week. TMK Energy chief executive officer Brendan Stats.

Stats said the company would continue work moving into next year to de-risk the project as it strived to demonstrate its proof of concept and a commercial gas flow for a hungry market.

TMK says its pilot production wells continue to display characteristics typical of most successful coal seam gas projects during the initial desorption period. That is, when the downhole pressure is reduced to facilitate migration of gas molecules from the formation pore space into the wellbore and up to the surface where they are measured.

The company says the flow rates are not yet indicative of the final anticipated flow rates from the wells, but notes total gas produced has increased significantly from September through to November, with the estimated volume of gas produced last month about double that produced in August during initial flush gas production.

TMK will soon have 100 per cent ownership of the 8400-square-kilometre Gurvantes XXXV project, with shareholders from the company and those from joint venture (JV) partner Talon Energy approving a deal to see the former acquire the latter’s 33 per cent earned interest at respective general meetings last week. TMK says the completion of the transaction is expected to take place this Friday.

The Gurvantes XXXV project is adjacent to a coal mining operation run by Mongolian company Mongol Alt LLC (MAK), which has signed an offtake agreement for the water produced from the pilot, in addition to energy generated at site from the gas.

The longer-term plan may be for Gurvantes to service Mongolian domestic gas requirements and possibly China’s massive energy-hungry network. The main Chinese east-west gas pipeline lies tantalisingly nearby, some 300km south of the project across the border.

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