Blue Energy debuts 98% increase to 2C gas resources at Sapphire Block
Blue Energy has recommended the Bowen Basin southern gas pipeline project to unlock 15,000PJ of discovered gas resource to mitigate impacts of the East Coast domestic gas shortage.
Blue Energy (ASX: BLU) has debuted a 98% increase to the Sapphire Block’s 2C gas resources, within its wider ATP 814 field, after announcing it had spudded the Sapphire 5V well earlier this week.
Independent reserve and resource certifier Netherland Sewell and Associates completed the upgrade, which resulted in the significant increases to both resources and reserves at the Sapphire Block located in Queensland’s North Bowen Basin.
There was a 13% rise in 2P gas reserves to 66.5 petajoules, and 3P reserves were up 17% to 253.2PJ.
In the contingent resource category, 1C resources were up 134% to 154.3PJ, 2C rose 98.1% to 213.9PJ and 3C increased 15.2% to 214.4PJ.
There was an overall 47% rise in 3P-plus-2C aggregate resources to 467.1PJ of recoverable gas.
To place the updated resources and reserves for the Sapphire Block in context, Blue noted the entire state of New South Wales uses about 135PJ of gas annually.
Sapphire drilling program
The updated resources and reserves complement the pilot well drilling program underway at the Sapphire Block.
Blue stated the updated estimates also gave the company “further impetus” to consider expanding the drilling program.
The pilot well drilling campaign started yesterday with the spudding of Sapphire 5V, with the entire program designed to convert existing contingent gas resources to reserves from Sapphire Block inventory.
Sapphire 5V will be a drilled vertically and is designed to be the water aggregating and producing well for the multiple lateral ones within a Sapphire 5 pilot cluster.
Each of the subsequent lateral wells will be drilled for a specific coal seam.
Gas supply agreements
The well drilling campaign will shore up gas reserves and capacity to feed existing supply agreements with EnergyAustralia and Origin Energy (ASX: ORG).
Blue has inked a separate 10-year agreement with each company to supply a combined 400PJ of gas at Wallumbilla for the domestic market, with its remaining resources from ATP 814 uncontracted at this stage.
The current well drilling program is expected to generate new gas supplies to feed the east coast market, which is facing an energy crisis amid global supply shortages and surging prices.