Jade Gas, Mongolian Mining Corp sign MoU for gas, LNG supply

Australian energy company Jade Gas has entered into a non-binding memorandum of understanding (MoU) with Hong Kong-listed Mongolian Mining Corporation (MMC) for the supply of gas and LNG from its Tavan Tolgoi coal bed methane project (TTCBM) in Mongolia, it announced on February 29.

MMC, a joint-venture partner with Jade in the Baruun Naran coal field, operates two open-pit mines within the TTCBM permit area and the Baruun Naran Mine on the west side extension of the TTCBM permit area. Under the terms of the MoU, MMC will hold a non-exclusive option for gas products from both Jade's TTCBM and BNG projects.

Jade Gas aims to potentially supply two products to MMC under this agreement: LNG for heavy vehicles and gas for electricity generation. This initiative builds on the scoping work that Jade has already undertaken on small-scale LNG in the region.

MMC, in line with its commitment to sustainable practices under the Towards Sustainable Mining protocol and broader environmental, social, and governance initiatives, is exploring gas as an alternative fuel and cleaner energy source for its Mongolian mining operations and truck fleet, Jade Gas said. 

Negotiating a binding gas sales agreement with commercial terms is seen as a pivotal step for the conversion of resources to reserves.

“This MoU brings us closer to our commercialisation goals – with our 2024 field activity programme starting soon, and our ongoing marketing efforts, we look to convert our expansive contingent resource into reserves in the short-term,” Jade executive chairman, Dennis Morton, said.