Talon Energy Ltd (ASX:TPD) JV partner TMK Energy Ltd has advanced the pilot well program at the Gurvantes XXXV Coal Seam Gas (CSG) Project in the South Gobi Basin of Mongolia safely, on schedule and within budget.
Swift progress has been made at the project since it was acquired 18 months ago, drilling three pilot production wells in May and June this year, and installing surface facilities including gas flaring system, gas metering skids, produced water pipeline and general infrastructure, which is now about 80% complete.
The pilot program has been designed to flow gas to surface and gain greater understanding of the reservoir performance of the upper coal seam, thereby identifying the overall commerciality of the 1.2-trillion-cubic feet (2C) resource at the project.
TMK Energy has 67% of the project and is the operator while Talon Energy has 33%. The partners expect to begin production testing in mid-July.
Program represents proof of concept
“Since acquiring the asset some 18 months ago, TMK has drilled seven exploration wells, three pilot production wells and is now about to complete the construction activities associated with the first pilot well program in the Nariin Sukhait area, an area which has extensive coal production infrastructure, high energy needs and nearby access to northern China (via road and soon rail),” TMK Energy CEO Brendan Stats said.
“In November 2022, we booked a 2C Contingent Resource of over 1.2TCF from the intersection of thick (60 to 70 metres) gassy coals targeted in this pilot well program and subsequently signed an electricity offtake agreement with MAK, a local mine operator that has high energy needs.
“The final step in our exploration journey is proof of concept and flowing gas to surface from this pilot well program.
“We look forward with high anticipation to further positive results and being able to take the next big step forward which will be commencement of a pre-feasibility and field development study for the Nariin Sukhait area.”
The partners expect it will be a few months until gas rates increase from the wells, due to initially high levels of water and low levels of methane gas.
The three wells can be controlled remotely from Australia and from an office nearby.