TMK doubles gas outflow by adding three new Mongolian wells

TMK Energy’s Gurvantes XXXV coal seam gas project in Mongolia has all six of its pilot production wells flaring after the recent addition of three new wells, doubling the field’s gas outflow.

The new wells are gradually reducing water levels in line with the company’s water management plan, enabling gas breakthrough last week and the development of sufficient gas volume to carry a flare.

TMK says its gas flows remain pre-desorption in all wells for now and will remain in that non-commercial status until water is reduced to design levels, when all the wells will work together to continue pulling down reservoir pressure.

The company says it expects to reduce reservoir pressure and attain its targeted critical gas desorption point late in the current quarter or early in the next quarter.

‘…the total field production rate has more than doubled and we are clearly seeing the original three pilot wells being positively affected by the new wells now on production.’

TMK Energy’s chief executive officer Dougal Ferguson

Desorption pressure is an important parameter in modelling production from coal seam gas projects because it helps determine the pressure range at which gas can be efficiently extracted from the coal reservoir.

TMK Energy’s chief executive officer Dougal Ferguson said: “It is pleasing to see the new pilot production wells producing gas, which occurred at a time broadly in line, if not slightly ahead of, our expected timeframe. As expected, the total field production rate has more than doubled and we are clearly seeing the original three pilot wells being positively affected by the new wells now on production.”

Ferguson said the latest developments further affirmed the project following its successful drilling campaign. The company now anticipates progress at the project will accelerate as it closes in on attaining the critical desorption pressure required before being able to materially increase gas flow rates over the coming months.

In a further boost to the company’s fortunes, mid-December last year saw TMK signing a memorandum of understanding with a German-owned and operated supplier of power generation equipment for a gas-fired power plant to be imported into its Gurvantes project at no cost to TMK.

This remarkable early-stage opportunity to generate power comes subject to TMK achieving minimum gas well production by June 30 this year, which would give it entry to a two-year gas sales agreement for up to 0.6 terajoules per day from the pilot well project.

Is your ASX-listed company doing something interesting? Contact: matt.birney@businessnews.com.au