Petro Matad Limited (LSE:MATD) has announced that its SunSteppe Power subsidiary has signed a cooperation memorandum of understanding (MoU) with Saudi-listed energy developer Acwa to pursue a renewable electricity export project connecting Mongolia and China.
The proposed first phase targets 4.5 gigawatts (GW) of renewable energy generation capacity, supported by 500 megawatt-hours (MWh) of battery energy storage.
The agreement forms part of Petro Matad’s expansion into renewable energy through its 50%-owned SunSteppe Renewable Energy joint venture, alongside its existing oil exploration and production operations in Mongolia.
Separately, SunSteppe has identified a portfolio of renewable energy projects totalling 570 megawatts (MW), with potential development premia estimated at approximately $20 million to $30 million between 2027 and 2029.
Acwa Agreement Targets Cross-Border Electricity Exports
Under the cooperation MoU, SunSteppe Power and Acwa intend to explore the development of renewable electricity generation in Mongolia for export to China.
The initial phase of the proposed initiative would involve 4.5 GW of generation capacity and 500 MWh of battery storage.
The project is intended to utilise Mongolia’s solar and wind resources and its geographical proximity to China to support cross-border electricity supply.
The cooperation arrangement represents an early stage in the proposed development. The supplied announcement does not specify a construction timetable, investment commitment or agreed electricity offtake arrangements.
Further development would require the parties to progress technical, commercial and regulatory matters associated with renewable generation and cross-border power transmission.
SunSteppe Renewable Energy Portfolio Reaches 570 MW
SunSteppe Renewable Energy has assembled a portfolio of four renewable energy projects with a combined planned capacity of 570 MW.
The portfolio comprises three solar generation projects incorporating battery storage and one hybrid project combining wind, solar and battery technologies.
The joint venture estimates that these projects could generate development premia of approximately $20 million to $30 million over the period from 2027 to 2029.
These amounts represent potential future development proceeds rather than contracted revenue or realised earnings.
The portfolio forms part of SunSteppe’s strategy to develop renewable energy assets in Mongolia, including projects that could be advanced with external development or investment partners.
Additional 124 MW of Projects Under Consideration
Beyond its existing 570 MW portfolio, SunSteppe has identified a further 124 MW of potential renewable energy development opportunities.
These include a green hydrogen project associated with OT, which has access to Japanese grant funding.
The company is assessing these projects as potential additions to its renewable energy development pipeline.
SunSteppe has also identified off-grid electricity supply to Mongolia’s mining sector as a potential market exceeding 500 MW.
Mining operations in Mongolia represent a prospective customer base for renewable generation and storage systems, including facilities operating away from established electricity networks.
The identified market opportunity does not represent contracted generating capacity, and no associated customer agreements or revenue figures were disclosed in the supplied update.
Renewable Energy Activities Complement Mongolian Oil Operations
Petro Matad is an AIM-listed exploration and production company with oil interests in Mongolia.
The group holds 100% working interests and operatorship in the Matad Block XX and Borzon Block VII production sharing contracts.
Its 50% ownership of SunSteppe Renewable Energy provides exposure to renewable power development alongside these hydrocarbon activities.
Through SunSteppe, the company is pursuing utility-scale solar, wind and battery storage projects, as well as opportunities in green hydrogen and electricity supply for industrial customers.
The cooperation agreement with Acwa introduces a potential cross-border export initiative alongside the joint venture’s existing domestic project portfolio.
Development Timetables and Commercial Agreements Remain Outstanding
The proposed 4.5 GW renewable electricity export initiative remains at the cooperation MoU stage, with further agreements and development work required before implementation.
SunSteppe’s existing 570 MW project portfolio and additional 124 MW pipeline also remain subject to their respective development processes.
Petro Matad has identified potential development premia of $20 million to $30 million between 2027 and 2029, although the timing and realisation of those proceeds will depend on project progress and commercial arrangements.
The company will continue pursuing its renewable energy development activities through SunSteppe while maintaining its existing oil interests in Mongolia.
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