TT CBM Project

Jade Gas Holdings Limited is a gas exploration company focused on the coal bed methane (CBM) potential of Mongolia. Jade’s flagship project is the Coal Bed Methane gas project over the Production Sharing Agreement (PSA) area of Tavantolgoi XXXIII unconventional oil basin, (TT CBM Project). Jade will operate and manage the project through its subsidiary Methane Gas Resource LLC (MGR), a joint venture company (JV) partnering with Erdenes Methane LLC (EM), the representative of the Mongolian Government. The JV was formed with the intention to explore, develop and produce gas from the TT CBM Project located in the South Gobi region of Mongolia.

Jade’s joint venture partner, EM, was awarded a PSA over the TT CBM Project area in April 2020, after completion by MGR of the requirements of a Prospecting Agreement held by JV partner EM over the area. In accordance with the joint venture agreements, Jade managed, fully funded and operated the fulfillment of the PSA requirements during that period. Following approval of the Cabinet of Mongolia in October 2020, the PSA rights and obligations were fully transferred to the joint venture company MGR.

It is the strategy of Jade to seek to develop the Project so that gas produced may, in the long term, provide a reliable supply option to the oil and gas product market and to the power sector in Mongolia, both to the capital city of Ulaanbaatar and also into regional areas. Achievement of this strategy would partially displace the use of imported gas and gas liquid products, reduce the use of higher carbon emission emitting fuel sources such as coal and diesel, and reduce the air pollution of Ulaanbaatar city and other towns as well as mitigating the reliance on imported electricity.

Supporting Mongolia’s energy transition is a key priority for Jade, and success will result in:

  • Improving Mongolia’s energy independence
  • Supports capacity for Mongolia’s significant future energy demand growth
  • Decarbonizing the economy by improving the energy mix with cleaner fuel sources
  • Environmental, health and wellbeing benefits for the people and country of Mongolia

Figure 1: Project Location Map

Geology

Regional Structural Geology

Mongolia and Northern China were formed by a series of accretionary terrains that range in age from Proterozoic to Late Palaeozoic as shown in Figure 2.

Each successive accretionary belt was added from the south and wrapped around the Siberian Craton to the north, forming a series of concave north-wrapping arcs separated by ophiolitic suture zones. Two suture zones are present in Mongolia, the Baikalian Lineament in the north, which represents late Proterozoic accretion and the Main Mongolian Lineament in the south,
which represents Silurian accretion. In southern Mongolia, the oldest rocks are of late Precambrian to middle Palaeozoic age and were deposited as shallow marine carbonate and clastic facies, on passive continental margins. Mid-Palaeozoic orogenesis is associated with the collision of the Altai microplate in western Mongolia and the accretion of the central Mongolian microplate onto the Siberian Craton. Renewed sedimentation in the Altai foreland and also perhaps in marginal rift or back arc basins is represented by Devonian and Carboniferous continental and marine clastic and volcanic formations.

A Late Carboniferous to Early Permian orogenic phase marks accretion of the Gobi microplate onto the enlarged Mongolian-Siberian Craton, giving rise to a third suture which more or less coincides with the location of the present day Mongolian-Chinese border.

Late Permian to Early Jurassic sediments in southern Mongolia comprise a very thick sequence of coarse continental clastic formations overlain by locally occurring finer clastic, coal, and lacustrine sequences possibly deposited in foreland basins. These sediments were subsequently deformed during the Triassic to Middle Jurassic, when the Qiantang block (in China), collided with
the growing Mongolian-Siberian Craton.

Later periods of continental rifting occurred resulted in thick sequences of fluvial conglomerate and sandstone, floodplain coal, and lacustrine shale to be deposited in the rift basins through the Late Jurassic and Early Cretaceous. The southern Mongolia area was affected by significant tectonism and volcanic activity throughout the Late Cretaceous and Tertiary periods.

Figure 2: Regional Tectonic Setting

Local Structural Geology

The coal seams of the Tavan Tolgoi district accumulated in the Ulaan Nuur Trough, an intra-cratonic basin. The basin, generally regarded as a broad synclinorium, is the result of crustal subsidence of the basement rock adjacent to a large scale east to northeast trending fault system (mega-shear) that bounds the district to the north. Upper Permian coals accumulated in the subsiding basin and were subsequently faulted and folded from a moderate to intense degree by post-depositional tectonic events.

The Tavan Tolgoi coalfield is comprised of a series of east-west trending synclines and anticlines which are overprinted by a north-south trending anticline. While much of the Tavan Tolgoi is gently to moderately inclined, dips in the flanks of these structures can exceed 40°. Numerous east-west trending normal faults bisect the coalfield. Significant east-west trending thrust faults form the coalfield boundaries throughout much of Tavan Tolgoi, bringing underlying, older volcanics and non-coalbearing formations to the surface and truncating the coal resource areas.

Figure 3 shows the structural features of the Tavan Tolgoi coalfield. The areas of the coal-bearing formations are shaded. Two major fold structures are evident in the western half of the deposit, the Tsankhi Syncline and Tsankhi Anticline. The syncline hosts the structural basin containing the thickest coal-bearing sequence, while the anticline brings the lowest coal horizons to the surface.

Figure 3: Structural Geology Map