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Craig Nolan
TMK Energy and Mongolia’s Ministry of Energy have inked a deal to jointly study the rapid take-up of natural gas in the nation’s energy mix, with potential to supercharge the company if coal seam gas is given the green light as an additional fuel source.
The memorandum of understanding (MOU) will study the inclusion and benefits of adopting natural gas, including coal seam gas – also known as coal bed methane – into the East Asian country’s medium and long-term energy policy.
The plan is for the joint study to initially prioritise baseline studies on methane gas as a source for peak-load power generation, in a bid to shore up a reliable, continuous energy supply during peak demand periods. The initial study will focus on the use of coal seam gas to fuel peak load power supply and determine how the country’s vast resources can best reinforce its energy supply chain.
TMK, with its Gurvantes XXXV coal seam gas project in southern Mongolia, is ideally positioned to cash in on the possible addition of gas as a fuel source to complement the existing use of coal.
Mongolia has faced increasing challenges with its electricity system, struggling with supply constraints during peak winter months as demand for heating and industrial activity ramps up significantly.
‘This Memorandum of Understanding represents a significant step forward for TMK and the Mongolian Government.’
TMK Energy chief executive officer Dougal Ferguson
Existing generation capacity and ageing infrastructure have resulted in issues with meeting peak demand, leading to supply interruptions. There is a need to develop additional, flexible fuel sources to ensure a stable supply during peak load periods, and natural gas may be the obvious choice to bolster the nation’s supply levels.
The Ministry’s role is to develop, manage and regulate Mongolia’s energy sector, ensuring the system is reliable and supports its national development objectives.
Turning to the country’s vast coal seam gas resources may be the answer to meeting Mongolia’s power supply needs as it seeks a long-term solution to its energy generation requirements.
TMK Energy chief executive officer Dougal Ferguson said: “This Memorandum of Understanding represents a significant step forward for TMK and the Mongolian Government and recognition for the nascent coal seam gas industry in Mongolia. It signals further recognition by the government that natural gas remains a viable alternative to coal to further improve the long-term energy security of Mongolia and diversify its domestic energy sources.”
Ferguson said natural gas has the potential to provide a cleaner, efficient and highly responsive energy source that can complement existing and future generation infrastructure and reduce reliance on imported electricity.
Coal seam gas is a form of natural gas, comprising generally 95 per cent to 97 per cent pure methane. It is typically adsorbed to the coal matrix and trapped within the coal by water pressure. Transporting coal seam gas to the surface through gas wells normally requires the extraction of water from the coal fractures and cleats. This reduces the pressure, allowing methane to be released from the coal matrix. It is considered an unconventional gas.
Coal seam gas is considered a cleaner fuel because it produces about half the carbon emissions as coal-generated electricity and burns cleaner than other fossil fuels.
Natural gas differs in that it is a conventional gas, usually obtained from porous sandstone reservoirs with an impermeable rock layer that traps the gas under buoyancy. The gas will often rise to the surface through the gas wells, due to pressure, without the need for pumping.
Last week, the company notched up another new gas production record at its Pilot well project, which forms part of its Gurvantes coal seam project.
TMK set a new daily production record of 674 cubic gas metres, or more than 23,800 standard cubic feet per day, on 21 January. A new monthly gas record of 18,370 cubic metres of gas was also achieved.
Mongolia’s coal seam gas resources could benefit from twin motives. The country is not only looking to bolster its own energy supply, it also sits near to China’s northern gas pipelines, a potential source of massive gas volumes from any near-term gas development project.
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