Jade Gas (ASX:JGH) has executed a non-binding collaboration agreement with PT Beijing Energy Linking (PTBEL) to fund the development of phase one of the Red Lake Coal Bed Methane (CBM) Project in Mongolia. The agreement also outlines PTBEL’s appointment as lead contractor.
PTBEL will fully fund the phase one drill program, which comprises the 175-well drilling program and all associated infrastructure and liquefied natural gas (LNG) facilities, at an estimated cost of US$762.5 million ($1.1 billion). This estimate is based on an average drilling and construction cost of US$3.5 million per lateral, stimulated well, together with a scalable LNG liquefaction facility.
The agreement outlines that PetroChina and Hunan Geology & Mining Technology will be engaged as subcontractors to develop the project, with the goal of executing definitive agreements by the end of Q3 2026.
Jade Gas Executive Director Joe Burke says that this agreement comes at a time when global supply chains are increasingly fragile and the need to secure reliable, proximate gas is more urgent than ever.
“Subject to execution of definitive agreements, securing a partnership of this scale with PT Beijing Energy Linking, PetroChina, and Hunan Geology & Mining Technology Co Ltd — three of China’s most capable energy and drilling focused organisations — reflects the strategic value the world’s largest energy market sees in what Jade Gas has built in Mongolia,” Burke says.
“The financial and technical strength of our partners, combined with their proven execution track record in the Qinshui and Ordos basins, positions Red Lake to be developed at a scale and speed that would not have been possible alone.
“This collaboration provides a clear pathway to bring significant volumes of Mongolian gas to market, displacing diesel, supplying LNG, and contributing to the energy security of an entire region.”
Jade Gas has also received firm commitments to raise $11 million at $0.12 per share, representing a 14.3% premium to the company’s last trade price and an 11.3% premium to the 15-day volume weighted average price through the close of trading on 14 July 2026.
The company has also announced that Dr Ian Wang has transitioned from non-executive director to executive director effective immediately. Wang brings practical understanding and hands-on experience in CBM exploration and development across China, advancing projects from exploration through to commercial production.
Jade Gas is a gas developer focused on the CBM potential of Mongolia, transitioning from explorer to developer following the formal approval of Mongolia’s first natural gas reserves in June 2026.
Write to Amy Rotman at Mining.com.au
Images: Jade Gas Holdings
