Had a bit of a scan today for any recent developments, looks like there is a little bit starting to happen around Tavan Tolgoi and securing gas supply for industry
This article outlines their will and resource. A few standouts from the article
"Tavan Tolgoi deposit has a reserve of up to 10 billion cubic meter of methane. As for energy, one cubic meter of methane gas equals to one liter of diesel fuel. Therefore, it means TT deposit has a reserve of 10 billion liters of diesel fuel. Mongolia consumes over a million ton of diesel fuel a year in total. As this source of energy is a gas, it is ecofriendly and is usable on the spot,"
For context 1 BCM is equal to 38.2 petajoules so they are assuming to have 382PJ within the Tavan Tolgoi, this is the small tenement that EXR surround. A petajoule is worth circa $8m once in a sales gas pipeline on it's way to China.
"Extracting methane gas is economically beneficial for Mongolia and the Chinese market is interested in it, he added. It is estimated that 800 mWt energy can be produced and exported in the first stage. Mongolia needs to improve its power system of southern region. Therefore, use of coal mine methane will allow to ensure this need, the scholars estimated."
From the EXR acreage to the nearest Chinese gas pipeline it's around 400km, this is similar to the pipelines built in QLD to transport gas to the LNG trains on Curtis Island, there is no need to invest a ton of CAPEX into a LNG plant as this gas could go direct to pipeline. This in mind a project in Mongolia/China would likely require about half the CAPEX of the plants built in QLD.
Another interesting few snippets on the Chinese gas situation;
Since 2000, China’s natural gas consumption grew at a rate of 15.3 percent per year
Natural gas imports reached 60 billion cubic meters (m3), up 13 percent, including a 15 percent rise in pipeline gas from Central Asia, and a 10 percent increase in liquefied natural gas imports.
In my view this one is a simple case of proving that the gas is there and able to be moved, the country is supportive, the neighbors need the energy, EXR know the coal is there, they know it has the right properties to hold trillions of cubic feet of gas so it's going to come down to the permeability, prove this and EXR are in one hell of a good spot sitting on billions of dollars worth of gas.
EXR Price at posting:
4.0¢ Sentiment: Buy Disclosure: Held
