Methane Purity Tops 97% at Jade’s Red Lake Gasfield, Boosting Commercial Potential
Jade Gas Holdings has verified exceptionally high methane purity exceeding 97% at its Red Lake gasfield, underpinning its commercial LNG ambitions and opening new chemical feedstock opportunities.
- Methane content above 97% with CO2 below 1% confirmed in production wells
- High-quality gas supports primary LNG and CNG market focus
- Potential to supply chemical feedstock markets such as methanol and hydrogen
- Results enhance project economics and broaden commercial pathways
- Integration of data into subsurface modelling advances commercialisation plans
Exceptional Gas Quality Validated
Jade Gas Holdings Ltd (ASX – JGH) has announced compelling results from gas composition analyses at its flagship Red Lake gasfield in Mongolia’s South Gobi region. The tests reveal methane concentrations exceeding 97% with carbon dioxide levels under 1%, confirming the exceptionally high purity of the coal bed methane resource. This quality benchmark is critical for the company’s strategy to supply liquefied natural gas (LNG) and compressed natural gas (CNG) markets, which demand premium-grade feedstock.
Broader Market Optionality Emerges
Beyond LNG and CNG, the purity of the gas opens promising avenues in chemical feedstock applications. Methane serves as a foundational input for synthesising methanol and hydrogen, both pivotal in emerging clean energy and industrial processes. Jade’s Managing Director, Chris Newport, highlighted that these findings not only validate the company’s exploration approach but also broaden commercial options, potentially enhancing project economics and long-term viability.
Strategic Implications for Mongolia’s Energy Landscape
The Red Lake gasfield’s high-quality methane resource aligns with Mongolia’s broader energy transition goals. Jade aims to reduce the country’s reliance on imported diesel and coal-fired power by providing a cleaner, domestically sourced alternative. The company’s ongoing joint ventures, including partnerships with the Mongolian government and Mongolia Mining Corporation Limited, position it well to contribute meaningfully to energy security and environmental improvements in the region.
Next Steps Toward Commercialisation
Jade is integrating these gas composition results into its subsurface modelling and production planning, advancing toward commercial development. While LNG and CNG remain the primary markets, the company is actively exploring additional commercial pathways, including chemical feedstock supply. This multipronged approach could enhance volumetric efficiency and reduce processing costs, further strengthening the project’s economic case.
As Jade progresses, market watchers will be keen to see how these technical validations translate into commercial contracts and production milestones, potentially reshaping Mongolia’s gas sector dynamics.
Bottom Line?
Jade’s confirmation of ultra-pure methane sets the stage for diversified market entry and a pivotal role in Mongolia’s energy future.
Questions in the middle?
- What timelines and volumes does Jade anticipate for commercial LNG and chemical feedstock contracts?
- How will Jade’s partnerships influence the pace and scale of project development?
- What are the potential challenges in scaling production while maintaining gas purity?
