Jade Gas Secures Mongolia’s First Coal Seam Gas Reserve Approval

Historic Reserve Approval Opens Development Pathway

Jade Gas Holdings Ltd (ASX:JGH) has secured a landmark regulatory approval from the Mongolian Minerals Council for its maiden coal seam gas reserves, the first such endorsement ever granted in Mongolia. This milestone formally recognises the company’s TTCBM Project reserves in the South Gobi region and clears a critical hurdle toward commercial production.

The reserve booking covers a modest 4.2km2 segment of the 60km2 Red Lake Field and focuses on seam IIIb, one of several gassy coal seams identified. While the approval is geographically limited, it represents a crucial de-risking step, validating Jade Gas’ extensive exploration and appraisal efforts that included 19 core holes, seismic surveys, and production testing of lateral wells.

Development Plan Targets Modular LNG Supply

With reserve approval in hand, Jade Gas is poised to submit its Plan for Development and Operations (PDO), which will outline technical scope, infrastructure design, and environmental commitments. The initial phase contemplates drilling up to 175 wells to supply liquefied natural gas (LNG) primarily for Mongolia’s local transport network, with potential extensions to mining and industrial power users.

The broader vision envisages a multi-decade project spanning approximately 800 wells and a lifespan exceeding 30 years. The phased approach reflects a pragmatic scaling strategy, starting with a 40-well development supported by a small-scale LNG processing facility. This blueprint aims to deliver cleaner, domestically sourced energy, reducing Mongolia’s reliance on imported fuels and contributing to national decarbonisation goals.

Resource Upgrades Reflect Growing Confidence

The approved reserves represent a conversion of part of the previously reported contingent resources, now classified as “Justified for Development” under the SPE Petroleum Resources Management System. The 2P (best estimate) gross recoverable gas stands at 316 million standard cubic metres, with net recoverable volumes of 165 million cubic metres after accounting for Jade’s 60% project interest.

Meanwhile, contingent resources have expanded due to new data from additional drilling and production tests confirming sustained gas flow and methane purity exceeding 97%. Prospective resources remain in adjacent fields such as Vista and Brownhill, awaiting further evaluation and appraisal. This evolving resource profile underscores ongoing progress in delineating Mongolia’s unconventional gas potential.

Commercial and Financing Momentum Builds

Jade Gas is advancing commercial discussions with domestic and international partners following a recent board visit to Asia. The company is exploring various participation structures, energy offtake agreements, and infrastructure collaborations to underpin long-term project viability.

Financially, Jade Gas has secured a letter of intent for AU$70 million to fund initial drilling and LNG module construction, with firm agreements in place to drill development wells. These arrangements provide a solid foundation for the transition from appraisal to commercial production, contingent on regulatory approvals including the Exploitation Licence.

Non-Executive Director Ian Wang emphasised the significance of the milestone, noting the reserve booking covers only a fraction of the project’s potential and highlighting ongoing efforts to expand the reserve base and advance regulatory submissions.