Mongolia and TMK Energy Plan for Coal Gas Future

TMK Energy and Mongolia's Ministry of Energy have signed an agreement to look into using coal seam gas for the country's energy needs. TMK's projects in Mongolia are showing good progress in producing gas, which could help Mongolia and be sent to other countries.
By Newsroom | Energy, Mongolia |

A recent accord between TMK Energy and Mongolia's Ministry of Energy signals a concerted effort to study the role of coal seam gas (CSG) in the nation's future energy plans. This move, alongside ongoing pilot project successes, positions TMK as a key player in potentially transforming Mongolia's energy landscape and accessing lucrative export markets, particularly in China. The company's work at the Gurvantes XXXV project has seen steady progress in gas production and resource assessment, with agreements now focusing on integrating this resource into national energy policy and developing gas-to-power initiatives.

Timeline of Key Developments

TMK Energy's efforts to develop coal seam gas resources in Mongolia have unfolded over several months, marked by drilling achievements, production milestones, and strategic partnerships.

  • August 2025: TMK Energy drilled new pilot production well LF-07 at the Gurvantes CSG project, doubling its production capacity after 12 months of drilling.

  • October 2025: The company reported a 60% month-on-month increase in gas output from its Gurvantes XXXV project, with pilot wells producing gas at near-record levels.

  • November 2025: Pressure build-up tests at the LF-06 pilot well indicated reservoir pressure declining towards the gas desorption point, suggesting increased permeability.

  • December 2024: TMK Energy signed a Memorandum of Understanding (MOU) with Jens Energie LLC to develop Mongolia's first coal seam gas-to-power project, aiming for electricity to flow to the local grid the following year. TMK also announced its readiness for the first Mongolian gas production, aiming to shift from explorer to producer.

  • January 2025: TMK Energy announced a partnership with Jens Energie LLC, furthering its goal of becoming a gas-to-power initiative and creating a stable revenue stream.

  • February 2026: TMK Energy and Mongolia's Ministry of Energy signed an MOU to study the inclusion of natural gas, including CSG, into the nation's medium and long-term energy policy.

Evidence of Progress

Several indicators point to TMK Energy's advancing position in Mongolia's CSG sector.

Read More: EU Starts Trade Case Over Solar Panels

  • Production Records: In the period leading up to February 2026, TMK achieved a new monthly gas record of 18,370 cubic metres. Previous reports in October 2025 noted a 60% month-on-month jump in gas output, with pilot wells producing at near-record levels. In November 2024, gas flow rates were sufficient for a gas flare due to 98% pump uptime.

  • Drilling and Well Performance: By August 2025, TMK had completed seven operational wells at its Lucky Fox pilot project within the Gurvantes XXXV field, more than doubling the project's production capacity. Logging results for well LF-07 confirmed approximately 54m of net coal. Recent analysis for well LF-06 indicated the majority of water produced was from coal seams, not adjacent aquifers, a strong indicator of coal seam permeability.

  • Resource Assessment: The Gurvantes XXXV project holds an estimated 1.2 trillion cubic feet (Tcf) of 2C contingent resource and 5.3 Tcf in prospective gas. The project area covers approximately 8,400 km² and features multiple thick (>50m) coal seams.

  • Strategic Agreements: The recent MOU with Mongolia's Ministry of Energy aims to formally integrate CSG into national energy policy. A prior agreement with Jens Energie LLC aims to establish Mongolia's first CSG-to-power project. TMK also has a strategic alliance with Chinese energy consulting firm J-Energy.

Strategic Importance of Location

The Gurvantes XXXV project's geographical placement is a critical factor in its development strategy.

Read More: Ford Will Make Energy Storage Batteries Instead of Some EV Batteries

TMK teams with Mongolian Energy arm to map coal seam gas future - 1

  • Proximity to China: Located in the South Gobi Desert, the project is less than 50 kilometers from China's Shivee Khuren border crossing. This positions TMK to potentially supply gas to China's northern gas pipelines, a market with massive gas volume potential.

  • Domestic Energy Needs: Mongolia faces significant domestic challenges regarding energy security, reliability, and independence. TMK aims to contribute to addressing these issues by providing cleaner energy solutions.

Technological and Resource Assessment

TMK's approach involves detailed study of the coal seams and the gas trapped within them.

  • Coal Seam Gas (CSG): Also known as coal bed methane, CSG is a form of natural gas extracted from coal deposits. The Gurvantes XXXV project targets these specific formations.

  • Pressure and Desorption: Recent testing on pilot well LF-06 has shown a decline in reservoir pressure, moving towards the gas desorption point. This indicates the coal seams are releasing gas as pressure drops, a key step towards commercial production.

  • Water Management: Analysis confirms that water production is primarily from the coal seams, suggesting that the project is not draining surrounding non-coal aquifers, which is a positive sign for reservoir integrity and gas extraction.

Future Outlook and Development

TMK Energy is focused on transitioning from exploration to commercial production and power generation.

Read More: Belgium Turns Off Some Streetlights to Save Energy

  • Gas-to-Power Initiative: The partnership with Jens Energie LLC is designed to fast-track Mongolia's first CSG-to-power generation. Electricity is anticipated to flow to the local grid relatively soon.

  • Commercialization Pathway: The company is working to scale its pilot projects into a full-field development plan, aiming to become a cornerstone of TMK's commercial strategy.

  • Energy Transition: TMK positions itself as a contributor to Mongolia's energy transition, moving away from coal towards gas-based power sources.

Expert Commentary and Industry Position

TMK Energy's leadership views the company as a frontrunner in Mongolia's nascent CSG industry.

  • Industry Leadership: Dougal Ferguson, TMK Energy Chief Executive Officer, has stated the company is the "clear leader in the CSG industry in Mongolia" and the "most likely to be the first in the race to demonstrate the commercial potential of CSG."

  • Commercial Viability: Recent achievements, including sustained gas shows and successful pilot well operations, are seen as strong indicators of the project's broader commercial viability.

Conclusion and Next Steps

TMK Energy has established a clear trajectory toward commercial coal seam gas production in Mongolia. The recent collaboration with the Ministry of Energy, coupled with continued positive results from the Gurvantes XXXV project, underscores the potential for CSG to become a significant component of Mongolia's energy mix. Key next steps likely involve formalizing the integration of CSG into national energy policy, progressing the gas-to-power project with Jens Energie, and developing the full-field development plan for the Gurvantes XXXV resources. The strategic location near China offers a significant avenue for future export growth.

Sources Used:

Frequently Asked Questions

Q: What is coal seam gas?
It is natural gas found in coal.
Q: What is TMK Energy doing in Mongolia?
They are studying and producing coal seam gas at their Gurvantes project.
Q: Why is this important for Mongolia?
It could provide more energy for the country and help it use cleaner energy.
Q: Can Mongolia sell this gas to other countries?
Yes, its location is close to China, which needs gas.