Jade Gas Holdings JGH  has delivered gas to surface from its first horizontal production well at the Tavantolgoi coal bed methane (CBM) project in Mongolia. The breakthrough marks the country’s first production well gas flow and a critical proof-of-concept milestone for the Red Lake Field. It also advances the company’s field development plan and positions Jade to progress commercialisation initiatives. De-Risks Commercial Development Well RL-Hz-001 was brought online on 9 June 2025, with a carefully managed dewatering process over 56 days to protect the well bore and encourage stable gas release. Gas pressure developed in the casing in early August, with the company using initial flaring to reduce bottom-hole pressure and support ongoing dewatering. Jade’s integrated drilling partner DWK applied experience from similar wells in China’s Qinshui Basin, where geological conditions mirror Red Lake. The company said this operational success confirms the ability to extract commercial quantities of gas from the coal seams, and underpins Jade’s final Plan for Development and Operations (PDO) once it has confirmed the sustained rates of production. Scalable LNG Operation Jade believes the Red Lake field can support a large-scale LNG project to supply both Mongolian and export markets. Non-executive director Dr Ian Wang said Jade plans to replicate the proven well design across the field to deliver a long-term gas supply, adding that gas flow data from the first two wells would also enable a reserve booking and regulatory clearance for the PDO. “This milestone now sets our pathway for Jade to become a significant gas operator in Mongolia, and with demand growing in large customer markets on our doorstep, we are building that momentum at the right time,” he added. The company expects a second horizontal production well to flow gas shortly, providing further validation of the development model, while commercial studies are already considering staged development to optimise production while keeping upfront capital costs low. Next Steps and Commercial Pathway Gas flow rate measurement and reservoir evaluation will continue at RL-Hz-001 to build a complete performance profile. Once both wells have confirmed flow data, the PDO will be completed to detail the scale, schedule and capital requirements for field build-out. Parallel initiatives include discussions with potential partners to accelerate early production, project debt financing options and a planned dual listing on the Hong Kong Stock Exchange Jade said is intended to capture growing regional demand for cleaner energy and to fast-track cash flow generation. The company is also advancing its broader CBM portfolio, including the Baruun Naran joint venture with Mongolia Mining Corporation and the Shivee Gobi and Eastern Gobi permits. Mongolia’s Energy Transition Jade’s strategy aims to replace Mongolia’s reliance on imported gas and diesel with domestically produced CBM, and sees long-term opportunities to supply compressed or liquefied natural gas to heavy transport and power generation markets. The company believes successful development would improve national energy security, reduce emissions and deliver health benefits through improved air quality. Jade also noted the Red Lake project’s strategic location in the South Gobi, close to infrastructure and key industrial centres. The company sees timely execution of its PDO aligning the project’s first production with forecast increases in domestic and regional energy demand.

Published Date:2025-08-13