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Jade Enhances MOU with UB Metan to Supply Newly Built LNG Fuelling Station

Jade Gas Holdings ASX:JGH 4 mins read


Highlights

  • Jade confirms it has enhanced its MOU with UB Metan LLC, its strategic shareholder, and the largest distributor of gas in Mongolia

  • The updated MOU will focus on UBM’s newly built LNG fuelling station located 10km from Jade’s TTCBM Project

  • UBM intends to scale its LNG capabilities to displace up to 13,000 diesel haulage trucks located in the Tavan Tolgoi area

  • Jade’s TTCBM Gas Project is set to support cleaner emissions by displacing costly and carbon intensive diesel that is currently sourced from Russia

  • The partnership with UBM continues to demonstrate the high demand for gas in multiple markets underpinning Jade’s pathway to gas reserves, gas offtake agreements and project commercialisation.

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Jade Gas Holdings Limited (ASX:JGH) (Jade or the Company) confirms that it has enhanced and extended its existing Memorandum of Understanding (MOU) with UB Metan LLC (UBM), its strategic shareholder and the largest distributor of gas in Mongolia, to focus on supplying gas to UBM’s newly built LNG fuelling station, which will provide a new domestic source of energy in the South Gobi region progressively displacing diesel.

Commenting on the enhanced MOU with UBM, Jade Executive Chairman, Dennis Morton, said:

“We are clearly seeing a shift in the demand for cleaner sources of energy with gas becoming a high priority in the diesel dominated South Gobi region. Jade’s gas assets are on the doorstep of this demand, so it is logical that we now enhance discussions with existing partners like UBM, already well advanced in retailing LNG in Mongolia, to establish a commercial pathway for our gas and sell it into the local markets on a mass scale.

Displacing diesel in the region is a significant opportunity, not only for Jade, but for our partners and the government to support their ESG related emissions reduction goals. In parallel, Jade also represents a strategic new domestic and secure energy supply that is connected to real markets.”

 

Enhanced MOU Overview
Jade signed a non-binding MOU (see ASX Announcement 5 April 2022) and agreed a strategic capital placement (see ASX Announcement 14 March 2023) with UBM to pursue a strategic partnership to decarbonise Mongolia with a cleaner source of energy. The recent completion of UBM’s LNG fuelling station has raised the priority for the companies to enhance the existing MOU and fast track negotiations toward an agreement for a local and secure gas supply from Jade’s TT CBM Gas Project. The enhanced MOU provides a visible path forward for Jade to potentially commercialise its gas assets.

It is envisaged that under the enhanced and extended MOU, the parties will focus resources to assess and evaluate midstream requirements to facilitate the conversion of Coalbed Methane (CBM) to Liquefied Natural Gas (LNG), and the delivery mechanism to connect with UBM’s existing LNG wholesaling operations.  The infrastructure is likely to involve low cost and small scale, scalable skid mounted LNG equipment.

LNG Fuelling Station
The UBM built LNG fuelling station is strategically located in close proximity to local mines and the major road to the Chinese border. Its location is less than 10 km from Jade’s TTBCM Project in the South Gobi region of Mongolia (Figure 1) and became operational late February 2024, with valuable data to be collected on fuel usage and efficiency during the trial period. This is UBM’s first LNG fuelling station outside of Mongolia’s capital, Ulaanbaatar (UB), and has been built in order to exploit a significant opportunity in the region by supplying LNG as fuel for up to 13,000 diesel haulage trucks, progressively displacing diesel with LNG. The transition to LNG is designed to deliver a large reduction in carbon emissions, supporting the company’s Environmental, Social and Governance (ESG) ambitions, along with cost and operational optimisation.

Figure 1: Strategic location of UBM’s LNG Fuelling Station in proximity to local mines and Jade’s MGR Camp

The LNG fuelling station has commenced servicing a new LNG market in the South Gobi region of Mongolia. Presently, LNG is sourced from Russia, which is then railed over 2,000 km to UB. From UB, the LNG container vessel is transferred to trucks and driven to the station at Tavan Tolgoi, where it is unloaded into storage facilities. Jade directly supplying gas to the LNG station, as a domestic fuel located close to the LNG terminal, is expected to provide material advantages to the market, and importantly, it is expected to increasingly displace imported and highly pollutant diesel from Russia.

Figures 2 and 3: Photos showing UBM’s recently opened LNG Fuelling Station

 

For further information contact:

Elvis Jurcevic
Investor Relations
+61 408 268 271
ej@jadegas.com.au

 

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