Resource-rich Mongolia has started preliminary work on a coal-to-gas project that would export most of the produced syngas to its neighbor China, the world’s largest energy consumer, a Mongolian newspaper reported.

Work teams have been established to collaborate with Chinese teams to conduct survey on mines and water resources, the Mongol Messenger cited the state secretary of the Mongolian Mining Department as saying. The present work target is to finish pre-feasibility study by the end of July, the official said.

The planned coal-to-gas project was part of the energy MOU signed by the two countries during the Mongolian Premier’s official visit to China late last year, according to the report.

The proposed project, which may cost about $30 billion to build, is expected consume 50 to 80 million tonnes of coal and produce 15 billion cubic meters of syngas per year.

Majority of the gas output would be sold to China, as Mongolia’s current annual gas consumption is only about 2 billion cubic meters, the report said.