Under a Production Sharing Agreement (PSA) with The Mineral Resources and Petroleum Authority GOH LLC, an Australian company, will conduct exploration activities for coalbed methane gas in Omnogobi aimag. The environment will be much safer if the methane is stopped from escaping into the air. Ch. Sumiya talks to B. Achitsan, General Manager of GOH, to find out more about the project.
Is the work going well?
Since its establishment in 2011, GOH has been exploring for coalbed methane (CBM). We signed the agreement with the Government of Mongolia on September 18, 2018 and have been carrying out various studies in the chosen area. A detailed environmental impact assessment has been completed, and we are now identifying the heritage sites there. We have met with citizens of Jargalant, Khondot and Ogoomor bags of Khankhongor soum and shall soon submit our exploration plan.
How many soums are being covered by your studies?
The area where we have been asked to work covers the territory of seven soums -- Tsogt-Ovoo, Khankhongor, Bayan-Ovoo, Tsogttsetsii, Manlai, Khanbogd and Nomgon. As is the practice in any petroleum and gas sector project, the total area is divided into 20 sections, collectively called Nomgon IX block.
Ours is the first PSA in Mongolia on CBM. We are formally part of the petroleum sector, mainly because there is no separate gas sector here. The Petroleum Law had no provisions to regulate work on CBM until amendments in 2014 introduced the concept of unconventional oil and gases and set out regulations for them. The government has been supporting our work as it progresses.
What are the main concerns raised by citizens at their meetings with you?
Citizens ask various types of questions, mostly related to the possible negative impact on the environment of our work. We try to allay their concerns by carefully explaining how our project would actually reduce air pollution and how it coincides with state policies.
What benefit will the project bring to Mongolia and specifically to Omnogobi?
The project has two phases: exploration and mining. The first will have to be over within ten years from signing the agreement. If the exploration is successful and reserves are established, mining will start. The project would have a 40-year span of life, but it is premature to talk of this without knowing what success the exploration will have. As for the benefits from the project, there is growing demand for methane gas as it is used not only
in heat and energy producing industries, but also in agriculture, producing fertilizer, and in developing infrastructure.
Methane is a pure source of energy. It is also a significant resource for fighting air pollution, which is an urgent problem not only in Ulaanbaatar but also elsewhere in Mongolia. We hope that we shall find enough methane to not only meet domestic needs but also to export. There are many natural gas consumers apart from China, such as many Southeast Asian countries, South Korea and Japan.
Besides producing methane to help fight air pollution, the project will generate jobs. While most oil and gas companies here hire foreigners for their work, we will employ Mongolians and use locally available equipment. Petroleum exploration work is conducted up to 4000 km under the earth and our project will go as deep as 1000km. Our plan is to conduct a seismic survey and drill 1-2 holes this year.