TMK Energy signs power offtake pact in Mongolia
Australia’s TMK Energy has signed an agreement with mining company Mongol Alt (MAK) to supply electricity generated from the gas produced from its three-well pilot production programme, it said on March 20.
The MAK Group currently owns and operates the coal mining lease on which TMK is undertaking its first pilot well programme on the Gurvantes XXXV coalbed methane (CBM) project.
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“The agreement represents a key milestone for the Gurvantes XXXV project as it will lead to significant efficiencies in the pilot well programme as well as providing a clear pathway to early commercialisation by providing electricity to one of the largest users in the area,” TMK said.
Subject to regulatory approvals, the gas produced from the three pilot production wells will be used for modular power generation (1MW - 10MW) which will be sold to MAK at the prevailing local wholesale price.
“Without such an agreement, the gas produced from the pilot well programme would be required to be flared. This initiative and agreement with MAK allow for an environmentally sensible and commercially attractive way to utilise the gas produced from the pilot well programme,” TMK said.
TMK has also agreed to provide MAK with the water it will produce in the early stages of the operation of its pilot well programme. “This is beneficial to both parties as it removes the requirement for TMK to build and operate separate water storage and handling facilities and allows for the beneficial reuse of the water by MAK,” the company said.
MAK has agreed to provide TMK with access to its heavy machinery and support equipment and personnel for the construction activities of the pilot well programme.