PERTH: Jade Gas Holdings Limited announced Thursday it has secured its first liquefied natural gas sales agreement for production from its coal bed methane project in Mongolia.
The initial five-year agreement is with UB Metan LLC, Mongolia’s largest importer of natural gas products. The deal commits Jade to supply a minimum of 20% of its LNG output from the Tavan Tolgoi CBM Project to UB Metan.
Pricing under the agreement will be set at a 20% discount to the average retail LNG price in Ulaanbaatar, Mongolia’s capital, with a floor price set at a 50% premium to the Japan-Korea Marker benchmark. The company said the current equivalent price is about $20 per gigajoule.
Supply is expected to begin following the installation of the first LNG processing unit near the Red Lake gas field, targeted for 2026. The agreement is subject to standard conditions, including board and shareholder approvals and the execution of a final definitive agreement.
Jade’s interim CEO, Chris Whiteman, called the contract a “very important milestone” that confirms the potential for a high-margin operation driven by strong regional energy demand.
The company said the deal supports its strategy to become a fully integrated LNG wholesaler and acts as a catalyst for key initiatives, including finalizing a field development plan, securing project partners and financing, and pursuing a potential dual listing on the Hong Kong Stock Exchange.
Jade Gas Holdings is focused on developing coal bed methane resources in Mongolia to provide domestic energy alternatives to imported diesel and coal-fired power.