Jade Gas, an Australia-based gas exploration company, has received approval from the Mineral Resources and Petroleum Authority of Mongolia for the Tavan Tolgoi Coal Bed Methane (TTCBM) project’s appraisal report.

The approval marks the completion of a significant phase in the company’s path to obtaining a long-term production licence for the project in Mongolia’s south Gobi region.

Approval of the appraisal programme confirms the viability of the gas discovery, supporting Jade Gas’ move towards development and commercial production.

Regulatory approval now enables the company to begin the process of reserve booking, which will validate and register its first gas reserves under Mongolia’s mineral and petroleum reporting requirements.

The initial reserve booking will apply to a small proportion of the project area, 4.2km², and will focus only on one of several known gassy coal seams.

This booking forms part of the procedural steps required under Mongolian regulations before moving to the next stages of development.

The regulatory body's formal acknowledgment of reserves will allow Jade Gas to proceed with its plan for development of operations (PDO).

Once reserves are registered, the company will submit this detailed plan outlining the project’s technical design, infrastructure requirements, projected production figures and adherence to environmental standards.

The initial phase of development involves drilling up to 175 wells. The project aims to supply liquefied natural gas (LNG) to Mongolia’s transport sector, as well as mining and industrial power consumers.

Future plans for the field could see around 800 wells drilled, with the project potentially running for more than three decades.

Jade Gas and its subsidiary, Methane Gas Resource, have held ongoing talks with Mongolian authorities throughout the review. The Australian company said that it is preparing the necessary materials for the environmental and social impact assessments required for further approvals.

Following the approval of the PDO, Jade Gas will submit an exploitation licence application, allowing it to formally shift from appraisal to commercial gas production, in accordance with Mongolian mining and environmental laws.

Reserve registration and PDO submission are described by Jade Gas as important regulatory milestones, providing additional clarity around the project’s commercial viability and compliance.

According to Jade Gas, securing these approvals will facilitate project financing for surface facilities and further field development.

Jade Gas CEO and managing director Chris Newport said: “Approval from the Mongolian regulator provides Jade with a significant endorsement and further de-risks the TTCBM project, at a critical stage as we focus on transitioning to development.

"The appraisal phase has delivered a large body of work that effectively gives us a deep understanding of the technical and commercial value of the project.”