Jade Completes Two Horizontal CBM Wells, Targets Early June Gas Production
Jade Gas Holdings has completed Mongolia’s inaugural horizontal coal bed methane wells at the Red Lake field, setting the stage for initial gas production by early June 2025. The company is advancing commercial partnerships to leverage this milestone for cleaner energy solutions in the South Gobi region.
- Completion of Mongolia’s first horizontal CBM gas production wells
- Pumping and dewatering to start pending regulatory approval
- Initial gas breakthrough expected early June 2025
- Focus on LNG and CNG partnerships for diesel replacement
- Strategic push to support Mongolia’s energy transition and reduce emissions
A Landmark Achievement in Mongolian Energy
Jade Gas Holdings Limited (ASX:JGH) has marked a significant milestone by completing Mongolia’s first-ever horizontal coal bed methane (CBM) production wells at the Red Lake gas field. This breakthrough positions Jade at the forefront of unlocking the country’s substantial natural gas resources, particularly in the South Gobi region, which is pivotal for Mongolia’s growing energy demands.
The two horizontal wells, RL-Hz-001 and RL-Hz-002, are now ready for the critical dewatering phase, a process that reduces reservoir pressure to enable gas flow. Pending regulatory approval, pumping is set to commence imminently, with initial gas expected to surface by early June 2025. While early gas volumes will be modest, Jade anticipates a gradual increase as reservoir conditions improve.
Strategic Commercialisation and Partnerships
Beyond the technical achievement, Jade is actively negotiating partnerships focused on liquified natural gas (LNG) and compressed natural gas (CNG) solutions. These efforts aim to replace diesel fuel currently used in heavy transport and power generation across the South Gobi, a region dominated by mining operations with significant energy needs.
By targeting LNG and CNG markets, Jade is not only tapping into near-term commercial opportunities but also aligning with Mongolia’s broader energy transition goals. The company’s strategy includes leveraging local equipment manufacturers and partners to accelerate market access and revenue generation from first gas production.
Supporting Mongolia’s Energy Independence and Environmental Goals
Jade’s flagship Tavantolgoi XXXIII CBM project, operated through its joint venture with the Mongolian government’s Erdenes Methane LLC, holds a substantial contingent gas resource estimated at 246 billion cubic feet. Alongside its Baruun Naran Gas project and other prospective permits, Jade is well positioned to contribute to Mongolia’s energy security.
Executive Chairman Dennis Morton emphasized the company’s commitment to optimizing operations as gas production ramps up and highlighted the environmental benefits of displacing diesel and coal-fired power with cleaner natural gas. This transition promises to improve air quality and support Mongolia’s decarbonization efforts.
As Jade moves from exploration to production, the company’s progress will be closely watched by investors and stakeholders eager to see how quickly it can convert this technical success into commercial returns and tangible energy solutions for Mongolia.
Bottom Line?
Jade’s pioneering horizontal CBM wells open a new chapter for Mongolia’s gas industry, but the pace of commercialisation will be the true test.
Questions in the middle?
- How quickly will regulatory approvals be granted to start pumping and dewatering?
- What initial gas flow rates and production profiles can investors realistically expect?
- Which partners will Jade secure for LNG and CNG commercialisation, and on what terms?
