Australian-listed energy company Jade Gas is preparing to begin the first phase of its Ulaan Nuur coalbed methane project at the Tavan Tolgoi coal deposit after securing 1.1 billion AUD (762 million USD) in financing for drilling operations and the construction of a liquefied natural gas (LNG) plant.

The financing agreement was reached through a strategic partnership involving China’s PT Beijing Energy Linking (PT-BEL), PetroChina and Hunan Geology and Mining Technology. Under the agreement, PT-BEL will fully finance the costs of the first phase of drilling activities and provide up to 10 drilling rigs to support the project’s development. The first rigs are expected to be deployed at the site in February or March next year.

The initial phase of the project will involve drilling 175 wells and developing essential infrastructure, including an operational base, access roads, communication systems and signaling facilities. It will also include the construction of a 150 million USD LNG plant, which will initially process gas extracted from approximately 40 wells.

As production expands, the LNG facility is expected to gradually increase its processing capacity, creating a new domestic energy source and helping reduce Mongolia’s reliance on imported diesel fuel. The project is also expected to contribute to regional energy security by providing a more stable supply of natural gas.

In addition to the project financing, Jade Gas has secured an additional 11 million AUD to support ongoing operations and prepare for a potential secondary listing on the Hong Kong Stock Exchange.

Located within the Tavan Tolgoi coal region, one of Mongolia’s largest coal-producing areas, the Ulaan Nuur CBM project represents a significant step toward commercializing the country’s unconventional gas resources. The development is expected to support Mongolia’s energy diversification efforts while creating new opportunities in the natural gas sector.