Blue Energy boosts gas flow at Sapphire with early success in pilot testing program

Blue Energy (ASX: BLU) has achieved early success with its plans to increase gas flow rates at its Sapphire pilot testing program in Queensland’s North Bowen Basin.

After identifying an opportunity to overcome technical issues at the project, Blue is currently undertaking Sapphire 5/6 pilot production testing operations.

To date, the pilot wells are continuing to flow gas at increasing rates, currently hitting 150,000 cubic feet per day (cfd).

Neighbouring wells

The company is looking to obtain similar average flow rates to the 200,000cfd being recorded in wells in the adjacent Moranbah gas project.

The lowest coal seams in both Sapphire pilot sets are now being de-pressured in the current program and effective gas desorption is occurring as the water levels near the top of these seams.

Blue identified a low-cost opportunity to improve gas flow at Sapphire earlier this year, following a recommendation for the proposed “twinning” of one of the existing lateral wells to target a single coal seam.

Formation damage

That program would be undertaken without a drilling fluid program and with no additives, after an independent review identified potential formation damage related to a component of the fluid used in the pilot well drilling.

The review was conducted to investigate why flow from the Sapphire 5 and 6 lateral pilot wells was below what was expected and lower than the rates of neighbouring projects.

It was also discovered that the lowermost coal seams in the wells remain below the current water level in the vertical wells and will require de-watering.

Sizeable resource

Following the completion of the 2022 pilot drilling campaign, Blue announced independently-assessed resource and reserve upgrades for the Sapphire Block that saw 2P and 3P gas reserves increased to 91 petajoules and 287PJ, respectively.

The increase in Sapphire 2P reserves reflected 80% of the total envisaged gas supply volume required under a non-binding memorandum of understanding (MoU) with Queensland Pacific Metals (ASX: QPM).

Under the MoU, Blue would supply gas to the proposed QPM nickel refinery in Townsville.