In a first for coal seam gas wells in Mongolia, TMK Energy (ASX: TMK) has revealed plans to use cutting -edge temperature testing technology in two new pilot production wells at its Gurvantes XXXV project in the South Gobi Basin.
The company has today confirmed it will use Abu Dhabi-based Taqa’s Distributed Temperature Sensing (DTS) technology to help optimise its well and reservoir performance as it embarks on the second phase of its pilot well drilling program by the end of this month. Management says it is the first time such technology has been deployed in coal seam gas wells in Mongolia.
The DTS fibre optic technology will allow for refined modelling of the project’s upper seam and is designed to identify zones of increased gas and water influx (that is, permeability). It is expected to assist the company in understanding the reservoir characteristics, enabling future wells to target optimised production performance from “sweet spots” within the coal seam.
The close spacing of the two pilot wells will allow for the simple correlation of “real time” data from the technology so that those sweet spots can be subsequently targeted by alternative drilling and completion methods. Management says it expects the DTS equipment to soon be delivered to the project site.
The last 12 months or so of pilot well testing has clearly shown that there is sufficient permeability within the upper coal seam and that gas can flow to surface, but now we need to target the highest performing zones so we can optimise the design of production wells in the future. Knowing which zones are contributing gas and water within the ~70 metres of the upper coal seam is imperative to optimising the production capacity of this field.
TMK Energy interim CEO Dougal Ferguson
The company’s wholly-owned Gurvantes project represents the biggest contingent gas resource in Mongolia and lies about 400km from a major gas pipeline in China. The independently-certified resource at Nariin Sukhait, completed by Texas-based consultancy Newell, Sewell and Associates, of 1.2 trillion cubic feet (TCF) is seen to have significant exploration upside estimated at up to 5.3 TCF.
The resource density of 33 billion cubic feet (BCF) per square kilometre at the site compares favourably to other similar coal seam gas projects, such as the Bowen Basin in Queensland, which has 4.8 BCF per square kilometre.
In 2023, TMK ran a phase-one pilot production well drill program comprising three wells (Lucky Fox 1, 2 and 3) and confirmed an upper bituminous coal seam about 70m thick. Initial gas build-up flowed for about three hours, demonstrating that the gas flowed from the coal seam.
Depressurisation of the reservoir can take several months, but pump speeds have since been gradually increased to reduce fluid levels and consequent hydrostatic pressure. The upcoming two-well drill program will infill those holes, but also incorporate the DTS reservoir monitoring technology and its fibre optic cable can be retrieved from a well to be redeployed for further use.
There are six active coal mining operations in the area that are importing energy from China. Those operations would no doubt benefit from a local energy source and in general, Mongolia requires a clean and domestically- sourced energy supply.
The country now boasts a stable political environment with a democratic government. The mining jurisdiction is favourable and the nation remains supportive of foreign investment as 90 per cent of exports involve the mining sector – which is the country’s biggest employer.
So, it appears that both Mongolia and TMK would be well-placed to benefit from the confirmation of a major new energy source.
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