Blue Energy continues push for new gas pipeline to meet critical supply issues

Blue Energy ASX BLU gas pipeline critical supply issues Queensland Northern Territory
Blue Energy is looking to provide vital “timely and reliable” energy supplies to the eastern states.

Queensland and Northern Territory explorer Blue Energy (ASX: BLU) says it is continuing to work with the National COVID-19 Construction Committee (NCCC) to prioritise new gas supply for eastern Australian manufacturing.

This follows the leaking this week of the NCCC final report that recommends Australia’s Federal Government underwrite gas supply contracts and gas pipeline infrastructure.

Back in April, Blue Energy called on the Federal and Queensland governments to build a Bowen Basin southern gas pipeline that could unlock 15,000 petajoules of discovered gas to provide vital “timely and reliable” energy supplies to the eastern states.

The company had at that time just begun a pre-feasibility study on a Bowen Basin fast-start gas fired power generation plant which it said would provide flexible, reliable and dispatchable electricity to “a fragile North Queensland grid”.

Blue Energy has been campaigning for a single, multi-user pipeline running 500km from Moranbah connecting to the Gladstone/Wallumbilla pipeline that would be capable of delivering up to 300 terajoules per day to the domestic market.

This potential project would be in addition to providing natural gas for the southern, pipeline-dependent market and the northern market of Townsville.

In its June quarterly report, Blue Energy said it working with APA Group (ASX: APA), Arrow Energy, the Federal and Queensland governments, as well as with the NCCC, to ensure the Moranbah-Gladstone to Wallumbilla pipeline gains broad acceptance as a piece of critical energy infrastructure vital for the manufacturing sector and Australia’s economic recovery.

Power plant study looks at peak and baseload potential

Underwriting new gas demand is seen as an important government function.

The leaked NCCC report calls for the Australian Government to group together multiple smaller gas users and, if they did not consume all the supply, then Canberra would pay for it.

The NCCC report argues that the gas industry needs to expand extraction and help create up to 170,000 new manufacturing jobs.

Meanwhile, Blue Energy’s quarterly report says the company’s pre-feasibility and business case study on power generation options has highlighted that gas-fired peaking generation is economic for a range of uses.

Blue Energy is looking at a scalable plant to service demand in its region as more intermittent solar energy is brought into the grid. But it is also looking at the potential for finding customers who would be seeking baseload supply as a means of broadening the scope of the project.

“The project will be doubly useful given the large renewable energy (solar) project roll-outs in Queensland in the next few years and … the faster than expected shuttering of coal-fired generation on the east coast,” Blue Energy stated.