Blue Energy completes drilling phase at Sapphire coal seam gas block, moves to production testing
Blue Energy says its upcoming appraisal program at the Sapphire Block is “vital” to establish new gas supplies for the east coast market, which is in crisis.
Blue Energy (ASX: BLU) has completed the drilling phase of its Sapphire block well appraisal program with production testing to begin in the final week of this month.
The Sapphire block is part of Blue’s ATP 814 coal seam gas field in Queensland’s North Bowen Basin.
Drilling comprised completed two pilot wells (Sapphire 5V and Sapphire 6V), with each pilot well having separate lateral wells: Sapphire 5 L1, L2, L3 and L4, and Sapphire 6 L1, L2, and L3.
The lateral wells access individual coal seams and their respective pilot well.
Sapphire 5V and Sapphire 6V are the water producer vertical wells and enable the lateral wells to meter and measure gas flow from each coal seam.
All-up, the program comprised 14,000m of hole drilling, with about 8,000m in horizontal completed.
The program is targeting three Permian Coal Measures: Rangal, Fort Cooper and Moranbah.
Pilot production testing
With the drilling phase complete, Blue expected to finish installation and connection of surface facilities to begin commissioning of the Sapphire 5V well for production testing.
Work will then move to the Sapphire 6V set for testing.
Testing aims to establish flow rates and build the reserve base to shore up existing supply agreements with Original, Energy Australia and QPM.
The company also hopes with will help the economic case for constructing the North Bowen gas pipeline e to Wallumbilla to supply the Australian east coast gas market.
Feeding gas to the east coast
Blue plans to help alleviate the east coast gas crisis by producing from ATP-814.
The company has been advocating to the federal and Queensland governments to unlock the gas potential in the Bowen Basin, which it estimates contains about 15,000 petajoules in gas resources, which equates to about 30 years’ supply at current east coast demand levels.
Blue says the basin could be a “reliable and long-term” energy supply and put “fundamental downward pressure” on surging gas prices.
ATP-814 hosts 3,000PJ in gas resources, which could meet east coast demand for about eight years.
The Sapphire wells are 2km from existing producing wells at the adjacent Moranbah gas project, which is one of the earliest coal seam gas fields in Queensland.