Elixir says Mongolian CBM project on path to commerciality

Sydney-listed Elixir Energy on May 15 said that given the results achieved to date, its Nomgon coalbed methane (CBM) project in Mongolia is on the path to commerciality. The company has now resolved to expand the pilot project through an extension of the flow period and the drilling of an additional pilot well.

The company believes that CBM in Mongolia offers commercial advantages over Australia due to lower drilling costs and access to gas prices reflecting the East Asian region's status as an LNG importer.

In early April 2023, Elixir completed the workover of the two wells in the Nomgon IX CBM project. The existing completions were removed, cleaned, and replaced, with smaller pumps installed to better suit the water flow rates. The Nomgon-9 well has successfully resumed production, and various experiments are being conducted to control rates while monitoring back pressure and fluid levels, the company said.

The Nomgon-8 well is currently shut in and primarily used for monitoring interference pressure. To gather additional data, Elixir plans to drill a new pilot well, Nomgon-10. The company said it is evaluating the optimal drilling contractor selection for this well and has other drilling plans for 2023.

Elixir's 2023 exploration drilling campaign is set to begin shortly. The company has selected Top Diamond Drilling, a Mongolian-owned and operated contractor, for its five-well exploration programme. The regulatory processes for the exploration drilling programme and the preferred tenderer for the 2023 appraisal programme are nearing completion, it said.

Elixir is also planning a green hydrogen pilot project in Mongolia. The company in January last year signed a memorandum of understanding with Mongolia Green Finance Corp to support project finance for the first phase of its Gobi H2 project.