TMK Energy paves the way for early commercialisation of gas production

TMK Energy (ASX: TMK) announced a significant expansion of its cooperation agreement with Mongol Alt LLC – one of Mongolia’s largest private companies that operates in various industries including mining, finance, real estate, energy and infrastructure. Mongol Alt currently owns and operates the coal mining lease on which TMK is undertaking its first Pilot Well Program on the Gurvantes XXXV Coal Seam Gas Project. 

The agreement represents a key milestone for the Gurvantes XXXV Project as it will lead to various efficiencies in the Pilot Well Program, as well as providing a clear pathway to early commercialisation by selling electricity to one of the largest users in the area.

Mutual gain for both parties

Subject to regulatory approvals and anticipated strong gas production rates, the gas produced from the three pilot production wells will be used for modular power generation (1MW to 10MW) which will be sold to Mongol Alt at prevailing local wholesale prices. 

“The opportunity to generate and sell power to MAK will allow TMK to demonstrate that the Gurvantes XXXV Project can provide a new and scalable domestic solution to meet the growing energy demand of the South Gobi region, and help address Mongolia’s energy security, reliability and independence,” said TMK CEO Brendan Stats. 

Without the agreement, the gas produced from the Pilot Well Program would need to be flared, which is both a waste of resources and environmentally harmful.

TMK also agreed to provide Mongol Alt with the water it will produce in the early stages of its Pilot Well Program. This removes the need for TMK to build a separate water storage and handling facilities, and allows for the beneficial reuse by Mongol Alt.

Mongol Alt has agreed to provide TMK with access to its heavy machine, support equipment and personnel, which will assist in the construction of activities of the Pilot Well Program. 

Pilot Well Program

The Gurvantes XXXV Project has a contingent resource of approximately 1.2 trillion cubic feet, making it the largest coal seam gas resource in Mongolia.

The Pilot Well Program seeks to flow gas to the surface to allow the company to gather additional reservoir data and demonstrate commerciality aspects of the project.

The company expects surface facilities and wells to be complete by the September quarter 2023.