TMK Energy has successfully initiated gas flows from three new pilot wells at its Gurvantes XXXV Project, doubling total field production and advancing toward critical desorption pressures expected by mid-2025.
- Three new pilot wells (LF-04, LF-05, LF-06) commenced gas production
- Total gas production from six pilot wells more than doubled recently
- Water levels in new wells are being gradually reduced to target reservoir pressure
- Critical desorption pressure anticipated in late Q1 or early Q2 2025
- Current gas flows are pre-desorption and not yet commercial
Pilot Wells Drive Production Surge
TMK Energy Limited (ASX: TMK) has reported a significant operational milestone at its Gurvantes XXXV Coal Seam Gas (CSG) Project in Mongolia. The company announced that gas flows have commenced from three recently drilled pilot production wells, LF-04, LF-05, and LF-06, joining the original trio of wells already producing gas. This development has more than doubled total field gas production, marking a pivotal step in the project’s progression.
The commencement of gas flow from the new wells occurred as water levels were carefully reduced in line with the reservoir management plan. This controlled drawdown is essential to lowering reservoir pressure and reaching the critical desorption point, where gas is released from coal seams in commercially viable volumes.
Progress Toward Critical Desorption Pressure
According to TMK’s CEO, Dougal Ferguson, the timing of gas breakthrough in the new wells was broadly in line with, if not slightly ahead of, internal expectations. The company anticipates that all six wells will reach their design water levels within the coming weeks, enabling them to work synergistically to further depressurize the reservoir.
TMK’s internal estimates project that the critical desorption pressure, the threshold at which gas flow rates are expected to increase materially, will be achieved by late Q1 or early Q2 2025. This milestone is crucial for transitioning from pilot-scale production to commercial operations.
Strategic Implications and Market Positioning
The Gurvantes XXXV Project is strategically located in Mongolia’s South Gobi Desert, less than 20 kilometres from the Chinese border and near existing gas infrastructure. This proximity offers TMK a significant advantage in supplying cleaner energy to both Mongolia and the vast Chinese market.
While current gas flows remain “pre-desorption” and not yet commercial, the doubling of production capacity from six wells is a strong affirmation of the project’s potential. It also reflects positively on TMK’s drilling campaign and reservoir management strategy, which are critical to unlocking the resource’s value.
As TMK continues to reduce water levels and monitor reservoir pressure, the company and its shareholders will be closely watching for signs of sustained commercial gas flow. The coming months will be pivotal in validating the project’s long-term viability and its role in addressing regional energy security and sustainability challenges.
Bottom Line?
TMK’s doubling of gas production is a promising step, but the journey to commercial viability hinges on hitting critical desorption pressures soon.
Questions in the middle?
- Will TMK achieve sustained commercial gas flows following the anticipated desorption pressure milestone?
- How will the company manage water production rates as reservoir pressure continues to drop?
- What are the potential timelines and challenges for scaling from pilot production to full commercial operations?