Zhengzhou Langrun Intelligent Equipment Co Ltd has signed a non-binding letter of intent to provide up to $46 million (AUD 70 million) in financing for a coal bed methane (CBM)-to-liquefied natural gas (LNG) project by Jade Gas Holdings Ltd in Mongolia.
The agreement is for the Red Lake gas field, part of the Australian company’s flagship project with the Mongolian government’s Erdenes Methane LLC to develop the Tavantolgoi XXXIII unconventional oil basin (TTCBM Project). Red Lake has 246 billion cubic feet of 2C gross unrisked contingent resources, according to Jade.
The Chinese CBM-focused gas equipment manufacturer would fund drilling and production for the next 18 wells in the field, Jade said in a stock filing. Jade has already drilled seven Red Lake wells according to the company.
The “non-dilutive financing” would also cover surface facilities for gathering, processing and liquefying gas produced from the field into LNG. The deal also includes “a low upfront capital outlay option, to be funded by future Jade revenue”, Jade said.
The parties agreed to consider expanding the terms to accommodate all 175 gas production wells in Red Lake’s first-phase development. Phase 1 involves 20 production wells, including two that came online June, according to Jade.
“Langrun’s expertise in the gas industry in China and in particular in CBM offers a great fit for Jade as the company seeks options to fast-track development of the Red Lake gas field and to optimize gas production for faster access to customer markets and ultimately early revenue”, Jade said.
“Subject to agreement of definitive documentation, and government and regulator cooperation and other approvals, the Red Lake gas field could potentially be developed to cover purification, pipeline and other transport, compression (for potential production of CNG), liquefaction (for production of LNG), refueling station construction, enabling gas sales for vehicle, industrial and other markets”, Jade said.
“Jade could provide the gas source, suitable land for construction of facilities, and operational rights, while Langrun will arrange the financing for drilling and associated production services, supply and install gas processing equipment and manage production operations”.
Jade added, “A binding agreement is subject to commercial flow rates being achieved at the first two production wells, regulator and Mongolian government approval”.
Langrun chief executive Wang Yongtao said, “We share in Jade’s view that there is a significant opportunity for gas in the southern Mongolian region, and Langrun has the experience and understanding to execute on this vision to take advantage of the gas demand in the region, particularly for LNG and CNG where we have a rich experience”.
“Jade has the potential for a large-scale, long-term energy project that can have a significant impact on the energy dynamic of the southern Mongolia and northern China region, and we want to be a part of that”, Wang added.
On Friday, Jade said it had issued two million shares without disclosure to investors.
To contact the author, email jov.onsat@rigzone.com
What do you think? We’d love to hear from you, join the conversation on the
Rigzone Energy Network.
The Rigzone Energy Network is a new social experience created for you and all energy professionals to Speak Up about our industry, share knowledge, connect with peers and industry insiders and engage in a professional community that will empower your career in energy.
element
var scriptTag = document.createElement(‘script’);
scriptTag.src = url;
scriptTag.async = true;
scriptTag.onload = implementationCode;
scriptTag.onreadystatechange = implementationCode;
location.appendChild(scriptTag);
};
var div = document.getElementById(‘rigzonelogo’);
div.innerHTML += ” +
‘
‘ +
”;
var initJobSearch = function () {
//console.log(“call back”);
}
var addMetaPixel = function () {
if (-1 > -1 || -1 > -1) {
/*Meta Pixel Code*/
!function(f,b,e,v,n,t,s)
{if(f.fbq)return;n=f.fbq=function(){n.callMethod?
n.callMethod.apply(n,arguments):n.queue.push(arguments)};
if(!f._fbq)f._fbq=n;n.push=n;n.loaded=!0;n.version=’2.0′;
n.queue=[];t=b.createElement(e);t.async=!0;
t.src=v;s=b.getElementsByTagName(e)[0];
s.parentNode.insertBefore(t,s)}(window, document,’script’,
‘https://connect.facebook.net/en_US/fbevents.js’);
fbq(‘init’, ‘1517407191885185’);
fbq(‘track’, ‘PageView’);
/*End Meta Pixel Code*/
} else if (0 > -1 && 94 > -1)
{
/*Meta Pixel Code*/
!function(f,b,e,v,n,t,s)
{if(f.fbq)return;n=f.fbq=function(){n.callMethod?
n.callMethod.apply(n,arguments):n.queue.push(arguments)};
if(!f._fbq)f._fbq=n;n.push=n;n.loaded=!0;n.version=’2.0′;
n.queue=[];t=b.createElement(e);t.async=!0;
t.src=v;s=b.getElementsByTagName(e)[0];
s.parentNode.insertBefore(t,s)}(window, document,’script’,
‘https://connect.facebook.net/en_US/fbevents.js’);
fbq(‘init’, ‘1517407191885185’);
fbq(‘track’, ‘PageView’);
/*End Meta Pixel Code*/
}
}
// function gtmFunctionForLayout()
// {
//loadJS(“https://www.googletagmanager.com/gtag/js?id=G-K6ZDLWV6VX”, initJobSearch, document.body);
//}
// window.onload = (e => {
// setTimeout(
// function () {
// document.addEventListener(“DOMContentLoaded”, function () {
// // Select all anchor elements with class ‘ui-tabs-anchor’
// const anchors = document.querySelectorAll(‘a .ui-tabs-anchor’);
// // Loop through each anchor and remove the role attribute if it is set to “presentation”
// anchors.forEach(anchor => {
// if (anchor.getAttribute(‘role’) === ‘presentation’) {
// anchor.removeAttribute(‘role’);
// }
// });
// });
// }
// , 200);
//});
