TMK gas surge clears path to production at Mongolian project

TMK Energy has delivered another impressive monthly update at its Gurvantes XXXV project in Mongolia, with March gas rates surging 48 per cent to 866 cubic metres per day, hitting a record 1,350 cubic metres in a single day.

The most recent well, LF-07, continues to steal the spotlight, confirming gas desorption is now underway and marking a key shift from early dewatering towards commercial-scale flows.

After a brief operational delay for safety and facility upgrades, output has rebounded to almost 23,000 standard cubic feet per day, with water production steady at 490 barrels per day - textbook reservoir behaviour in action.

The pilot well complex’s average daily output surged from 583 cubic metres in February. The star performer, LF-07, showed pressure communication between wells - a clear signal that the reservoir is behaving as a connected system rather than isolated pockets. This growing connectivity should underpin more consistent, controlled and commercial-scale gas flows down the track.

Surface upgrades at LF-07 have also helped to sustain higher flows. TMK is now carefully managing output to preserve the reservoir, maximise long-term volumes and feed potential early-stage power generation projects.

TMK also bolstered its operational momentum with regulatory support. In mid-March, the company signed a memorandum of understanding (MoU) with Mongolia’s regulator, MRPAM, allowing gas to feed a pilot power project and establishing a framework to convert parts of the 8,400 square kilometre permit into an exploitation licence.

Approval of its 2026 work program has also greenlit three additional production wells for the year, reinforcing growth and ensuring a robust development rollout.

The acceleration of the gas rate at LF-07 is a clear demonstration that gas is being desorbed from the coals up-dip from this well and, more importantly, proof that we have reduced the reservoir pressure sufficiently to produce what appears to be commercially significant quantities of gas. The MoU signed with MRPAM, coincident with this increase in gas rates, is another positive indication that there is a very strong push by the Mongolian Government to quickly accelerate the growth of the gas industry.

With the MoU in place, TMK now has a ready-made market for its pilot production. To demonstrate the project’s potential to future off-takers, TMK is targeting a supply of 5,000 cubic metres of gas per day, with scope to scale up to 15,000 cubic metres per day under an extended arrangement.

Looking ahead, the company is expected to continue optimising its existing wells, potentially replicating the LF-07 design across new hotspots as it expands the pilot footprint.

TMK is sitting atop a contingent 1.2 trillion cubic feet of gas, with over 5 trillion cubic feet of upside less than 20 kilometres from the Chinese border - a stone’s throw from major infrastructure and energy markets. With Asian gas demand surging amid energy security and emissions pressures, the project’s potential scale and proximity appear to give it a clear commercial edge.

With rising output, regulatory backing and approved drilling, TMK looks set to convert early pilot success into a production-ready asset.

And if the gas rate continues to accelerate, the company could be poised to turn its Gobi Basin pilot into a major success story, delivering value and momentum in the Mongolian gas market.

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