Blue Energy positions itself for integral role in boosting east coast gas supply

With significant land holdings in proven and prospective gas regions in Australia, Blue Energy (ASX: BLU) is confident it can become an important supplier to the energy-hungry east coast.

The company has already proven up significant gas resources and inked agreements with a number of gas buyers in Queensland.

It is about to begin testing its significant Beetaloo Basin position in northern Australia, with both areas having the capacity to make a major contribution to an east coast market that is said to be desperately in need of new gas reserves.

Gas supply scramble

The Australian government’s desire to add new gas to the pipelines heading to New South Wales and Victoria was highlighted earlier this week when federal Resources Minister Madeleine King moved to bring on new supplies from a Shell-operated LNG project in Queensland.

An additional 40 petajoules will be made available for the domestic market for gas power generation between now and 2027 through an enforceable supply commitment with the Queensland Curtis LNG joint venture.

“The shift to clean, renewable energy is well underway, but in the meantime we need gas to ensure our energy system remains stable, reliable and affordable,” Ms King declared.

“The enforceable supply commitments will ensure Australian gas is available for Australian users at reasonable prices and on reasonable terms and give producers the certainty they need to invest in supply.”

The desperation of the Federal government confirms there is a real desire to add new gas supplies to the grid.

Sapphire the focus

Blue Energy is doing its part to help uncover new gas resources with its activities in the proven Bowen and Surat Basins in Queensland and the Beetaloo Sub-Basin in the Northern Territory.

The company’s major focus at the moment is the Sapphire project in the North Bowen Basin.

Currently undergoing pilot well testing, Sapphire is a proposed 117-well development located adjacent to existing production with access arrangements for connection through low pressure facilities

The company has already signed a number of memorandums of understanding for gas supply with a range of off-takers including AGL and Origin Energy for the supply of up to 600Pj over 10 years to Wallumbilla.

Surat Basin permit

In the Surat Basin, the company’s major focus is its sizeable Cobalt project in permit ATP 854, where Blue has so far identified a contingent gas resource of 398Pj.

Located just 70km from the Wallumbilla hub – one of Queensland’s major pieces of gas collection infrastructure – ATP 854 also benefits from having a pipeline running through the permit.

Blue has designed a pilot drilling program to establish 2P (proved and probable) reserves and commercial flow rates.

Beetaloo opportunity

The company’s most promising opportunity arguably lies in its large acreage position in the significantly under-explored Beetaloo Sub-Basin.

The area is currently the focus of major backing from the NT government, leading to an acceleration of exploration and development activities.

Blue has received approval to conduct a 2D seismic survey in 2024 as part of its farm-in commitment to obtain a 50% stake in the area.

The company is also looking to leverage information to be released from a recent Geoscience Australia regional deep 2D seismic program.

The area Blue is farming into is considered to have potential to contain both gas and oil.