Jade’s Gas Flow Milestone De-Risks Project but Faces Regulatory and Market Challenges
Jade Gas Holdings has achieved a landmark milestone with gas flowing from its first horizontal production well in Mongolia’s Tavantolgoi CBM Project, marking a critical step toward commercial gas operations.
- First horizontal production well at Tavantolgoi flows gas, confirming proof of concept
- Second well expected to flow gas shortly, supporting development plans
- Field development plan to be finalized after flow data from both wells
- Company advancing commercial partnerships, financing, and potential Hong Kong listing
- Milestone de-risks project and positions Jade as a key gas operator in Mongolia
A Breakthrough for Mongolia’s Gas Industry
Jade Gas Holdings Ltd (ASX – JGH) has announced a significant operational milestone with gas successfully flowing to surface from its first horizontal production well at the Tavantolgoi Coal Bed Methane (CBM) Project. This achievement, a first of its kind in Mongolia, marks a critical de-risking event that validates the company’s ability to extract commercial quantities of gas from the Red Lake Gas Field.
Commissioned on 9 June 2025, the well underwent a carefully managed dewatering process over 56 days to stabilize the well bore and allow gas pressure to build. The commencement of gas flow confirms the project’s proof of concept and sets the stage for further development and commercialisation.
Advancing the Field Development Plan
With the first well now flowing gas, Jade is poised to finalize its Plan for Development and Operations (PDO), which will outline the scale and staged approach for the full field development. The company awaits flow data from the second horizontal production well, RL-Hz-02, expected to begin gas flow shortly. Together, these data points will underpin reserve bookings and regulatory approvals.
Jade’s approach emphasizes low upfront capital expenditure combined with optimized production outcomes, reflecting a pragmatic strategy to scale operations efficiently. The geological similarities between the Tavantolgoi project and established CBM fields in China’s Qinshui Basin provide confidence that the broader field can be developed at a similar pace and scale.
Strategic Commercial Initiatives and Market Positioning
Beyond operational progress, Jade is actively pursuing commercial partnerships, project financing options, and a potential dual listing on the Hong Kong Stock Exchange. These initiatives aim to accelerate production and cash flow generation while leveraging Mongolia’s growing demand for cleaner energy sources.
Jade’s strategy aligns with Mongolia’s energy transition goals by providing a domestic, reliable supply of natural gas to power and transport sectors, reducing reliance on imported fuels and coal-fired power. The environmental and health benefits of this shift are significant, positioning Jade as a key player in the country’s evolving energy landscape.
Looking Ahead
The successful gas flow milestone not only validates Jade’s technical approach but also enhances investor confidence in the project’s commercial viability. As the company moves toward finalizing its development plan and securing regulatory approvals, market watchers will be keen to see how quickly Jade can scale production and capture market share in Mongolia’s nascent gas sector.
Bottom Line?
Jade’s breakthrough gas flow sets the stage for Mongolia’s first commercial CBM operation, with market and regulatory milestones ahead.
Questions in the middle?
- What sustained gas flow rates will the second well deliver, and how will that impact the development plan?
- How quickly can Jade secure commercial partnerships and financing to accelerate production?
- What regulatory hurdles remain before the Plan for Development and Operations is approved?
