TMK Energy is steadily turning promise into progress at its Gurvantes XXXV coal seam gas project in southern Mongolia. Rising gas production is now being matched by tangible steps towards commercialisation.

The company’s latest operations update shows average gas production during July climbed 5 per cent from the previous month to 778 cubic metres per day, equivalent to about 27,500 standard cubic feet per day (scfd). The upward trend has continued into August, with daily production now averaging more than 800 cubic metres per day and edging closer to the company’s next operational milestone of consistently producing more than 850 cubic metres per day, or 30,000 scfd.

Steady water production of about 441 barrels per day suggests the reservoir is continuing to respond as expected. As dewatering lowers pressure inside the coal seams, increasing volumes of methane naturally desorb and flow towards the wells – exactly the progression reservoir engineers have been hoping to see. The company says the improved performance came despite one production well being offline awaiting a pump replacement and several power interruptions during July.

Alongside rising production, TMK and local partner Dashvaanjil Group have completed engineering and design work for the company’s gas-to-power project. Subject to commercial agreements being finalised and a planned October final investment decision, the project is expected to be operational by December. It would provide TMK with an early pathway to commercialisation by converting its own gas into electricity for remote mining operations that currently rely on diesel or third-party power.

TMK has also strengthened its technical bench with the appointment of experienced US petroleum engineer Steve Skinner as chief operating officer to help steer the project through its next phase of development. Skinner brings more than 25 years of industry experience, including work in the San Juan Basin, one of the world’s pioneering coal seam gas producing regions. His appointment comes as TMK prepares to oversee the transition from proving Gurvantes’ coal seam gas potential to developing a commercial gas-to-power business.

Like the San Juan Basin, Gurvantes is a coal seam gas play where methane is stored within coal seams and progressively released as water is removed from the reservoir. Successfully managing that process is central to building reliable commercial gas production.

The steadily rising gas production at Gurvantes is intended to underpin TMK’s gas-to-power Project (GPP), which will convert that gas into electricity for remote Mongolian mining operations and provide the company’s first practical step towards commercialisation.

The GPP is expected to be operational prior to the end of this year and will demonstrate the benefit of the use of gas in power generation for remote mining projects in Mongolia.

With production continuing to build, TMK is preparing to kick off its 2026 work program, which will include drilling up to two new production wells and re-completing existing wells with smaller casing and pumps to improve long-term performance. All long-lead items have now been secured for the campaign.

Equipment is expected to begin moving into Mongolia in the coming weeks, while preferred drilling contractor Major Drilling completes final contract negotiations ahead of operations getting under way. The campaign is designed to demonstrate that the production gains achieved during the pilot can be repeated across a broader field development, using the operational lessons already learned at Gurvantes.

Today’s announcement fits neatly into TMK’s deliberate “prove, monetise, scale” strategy. Rather than leap straight into a full-scale gas development, the company is using its production pilot to better understand the reservoir and establish an early domestic gas market through power generation. It is then progressively building the technical and commercial evidence needed for larger-scale development.

The company’s Gurvantes project spans 8400 square kilometres in Mongolia’s resource-rich South Gobi Basin. Its independently certified 1.2 trillion cubic feet (Tcf) contingent resource occupies just 60 square kilometres of that tenure, highlighting the scale of the broader opportunity.

Unlike many frontier gas discoveries, Gurvantes already sits within an established mining district with major industrial energy users on its doorstep, allowing TMK to pursue a nearby domestic market through its planned gas-to-power project and monetise its gas close to the source before contemplating larger export opportunities.

With gas production continuing to climb, a gas-to-power project edging towards operation and a new drilling campaign about to be locked and loaded, TMK Energy appears to be methodically piecing together a significant Mongolian energy play. The pilot has largely done its job. The commercial phase is now coming firmly into view.

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