Jade Gas Advances Mongolian Project with A$1.1 Billion Funding Framework and Reserve Milestones

Regulatory Breakthrough Unlocks Development Pathway

Jade Gas Holdings (ASX:JGH) has reached a pivotal milestone with Mongolian regulators formally approving its appraisal program and accepting the country’s first-ever coal bed methane gas reserve booking. This regulatory green light confirms the commercial viability of the Tavan Tolgoi coal bed methane (TTCBM) Project’s Red Lake Field, marking a critical transition from exploration to development.

The approved appraisal report validates recoverable gas reserves over a 4.2km² segment of the 60km² Red Lake Field, with gross 2P reserves estimated at 316 million standard cubic metres and net recoverable gas of 165 million Sm³ under Jade’s 60% interest. The reserve booking lays the groundwork for Jade’s forthcoming Plan for Development of Operations (PDO), which outlines a phased drilling campaign targeting up to 175 wells in Phase 1, alongside modular LNG infrastructure aimed at supplying Mongolia’s transport and industrial sectors.

A$1.1 Billion Funding Framework with Chinese Consortium

Building on regulatory momentum, Jade signed a non-binding collaboration agreement with PT Beijing Energy Linking (PTBEL) on 20 July 2026 to fund and lead Phase 1 of the Red Lake development. The consortium, which includes PetroChina and Hunan Geology & Mining Technology Co Ltd as proposed subcontractors, is expected to finance the entire US$762.5 million (A$1.1 billion) capital expenditure for drilling and infrastructure.

Phase 1 involves a 175-well drilling program with an estimated cost of US$3.5 million per well and the construction of a scalable LNG liquefaction facility at an additional US$150 million. PTBEL’s investment will be repaid through a two-stage revenue-sharing model, initially receiving 80% of gas sale proceeds during cost recovery, then 30% of profits thereafter. Jade retains ownership of the project, with the funding structure designed to be non-dilutive to existing shareholders.

Capital Raises and Leadership Changes Support Growth

Jade completed a A$12 million placement in June 2026 at A$0.08 per share, representing an 11.3% premium to the 15-day VWAP, led by Evolution Capital and cornerstoned by L1 Capital and Terra Capital. Shortly after quarter-end, the company announced a further A$11 million raise at A$0.12 per share, although some investors have yet to settle. Despite this, total available funding stood at A$15.6 million at quarter-end, including cash, convertible notes, and director loans.

On the leadership front, the company appointed Xie (Richy) Shaobo as Strategic Advisor, bringing two decades of Asia-Pacific banking and commodities expertise, and promoted Dr Ian Wang from Non-Executive to Executive Director. Dr Wang’s extensive coal bed methane experience is expected to bolster Jade’s commercialisation efforts.

Operational Progress and Next Steps

Both production wells at the Red Lake gasfield are now online, producing gas and water, underpinning the transition towards commercial operations. Jade is advancing environmental and social impact assessments and preparing regulatory submissions necessary for the exploitation licence application, which will follow PDO approval.

The collaboration agreement anticipates mobilisation of up to 10 drilling rigs in early 2027, with pre-development activities such as engineering, permitting, and site preparation commencing in late 2026. The modular LNG facility planned will initially support production from the first 40 wells, with scope for expansion as output grows.

While the collaboration agreement remains non-binding and subject to definitive agreements and approvals, it represents a significant step towards unlocking large-scale gas production in Mongolia’s South Gobi region, aligning with national energy security and decarbonisation goals.