Tian Poh Resources Ltd. said Dec. 29 that it signed a memorandum of understanding with Shenwu Environmental Technology Co. Ltd. for strategic cooperation to advance a proposed coal-to-gas project, sourcing coal from Tian Poh's Nuurst deposit in Mongolia.
Phase one of the project development envisions the production of gas by 2020 to supply both the Mongolian and Chinese markets.
A special purpose vehicle, owned 81% by Tian Poh and 19% by Shenwu, will be established to own the plant and associated infrastructure.
Shenwu will be responsible for providing engineering, procurement and construction services, while Tian Poh will supply coal from the Nuurst deposit.
The project is consistent with China's One Belt One Road plan, and both parties are exploring the potential to obtain Chinese government funding to assist the project development. The companies will now progress discussions to finalize the contractual terms of the arrangement.
Tiah Poh recently said that it has received support from the Mongolian Ministry of Energy to advance a feasibility study for its proposed coal-to-gas project.