Jade (ASX:JGH) fuel deal gasses UB Mongolian MOU

Jade (ASX:JGH) fuel deal gasses UB Mongolian MOU

March 8, 2024 Off By Jack Baker

Jade Gas has enhanced its memorandum of understanding with UB Metan to supply its strategic shareholder and Mongolia’s largest gas distributor’s new fuelling station near its TTCBM flagship gas project in the South Gobi Desert.

Jade’s Mongolian partner intends on scaling up its domestic liquefied natural gas capabilities and displace up to 13,000 diesel haulage trucks currently reliant on the carbon intensive Russian-sourced fuel.

The declaration comes a little more than a week since Jade signed an MOU with a multi-billion-dollar coal power, and the company believes the enhanced pact continues to demonstrate high gas demand in multiple markets and underpinning its pathway to reserves, offtake, and commercialisation.

Jade Gas Executive Chairman Dennis Morton said the gas explorer was clearly seeing a shift in demand for cleaner sources of energy, with gas becoming a high priority in the diesel-dominated South Gobi area.

“Jade’s gas assets are on the doorstep of this demand, so it is logical that we now enhance discussions with existing partners like UBM, already well advanced in retailing LNG in Mongolia, to establish a commercial pathway for our gas and sell it into the local markets on a mass scale,” Mr Morton said.

“Displacing diesel in the region is a significant opportunity, not only for Jade, but for our partners and the government to support their ESG-related emissions reduction goals.

“In parallel, Jade also represents a strategic new domestic and secure energy supply that is connected to real markets.”

Mongolian momentum

Mongolia’s developing economy is still largely reliant on Soviet-era coal power to service its main cities, with Ulaanbaatar looking towards gas as a primary transition fuel.

The Land of the Eternal Blue Sky has the opportunity to import Russian gas through The Power of Siberia-2 pipeline but has its own untapped resources and formed the TTCBM joint venture with Jade to explore, develop, and produce domestic gas.

UB Metan is intent on accelerating its energy ambitions and put $11 million into Jade late last year with a view towards commercialisation.

Jade’s focus likewise rests on expanding and producing from its Mongolian gas fields spanning over 45 kilometres and currently holding a 246 billion cubic feet of unrisked gross 2C (best estimate) contingent resource.

The energy explorer sees plenty of upside left in its Mongolian territory, recently striking a “stunning” 104.6m gas intersection to that effect and believes the year ahead will be transformational as its development initiatives crystalise into commercial outcomes.

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