Blue Energy ready to fast-track Sapphire gas project after favourable Queensland court ruling

Blue Energy (ASX: BLU) is preparing to accelerate development of its Sapphire gas project after its recent court victory in Queensland.

The Land Court of Queensland, as part of its decision on the legal matter impacting the Sapphire development, granted Blue Energy subsidiary Eureka Petroleum an amended Environmental Authority (EA) over the PL 1034 production licence area.

The Sapphire pilot project is located immediately adjacent to the Moranbah gas project (MGP), a producing gas field in the state’s Bowen Basin recently acquired by Queensland Pacific Minerals Energy (QPME).

Legal issues resolved

Blue Energy’s management is now working with the Queensland Department of Natural Resources, Mines, Manufacturing and Regional and Rural Development to complete the award of the PL 1034 production licence and allow development of the important gas resource to proceed.

“Blue can now focus on this and its other tenements in the Bowen Basin, which contain significant gas resources […] vital to bolstering East Coast gas supply, local manufacturing, the stability of the electricity grid and many jobs and households that these sectors support,” managing director John Phillips said.

Despite a number of interruptions caused by surface facility maintenance issues, the company continues to progress Sapphire with production testing on the Sapphire 5 and 6 lateral pilot wells.

Field staff are now preparing to install replacement surface gear on the hydraulic pump unit at the Sapphire 5V vertical water well and to install new metering valves on the separators associated with the lateral gas producer wells.

QPME agreement

Blue has an existing non-binding agreement to supply gas to QPME’s proposed nickel refinery in Townsville.

QPME’s subsequent acquisition of the MGP offers the possibility for Blue Energy to utilise MGP infrastructure to fulfil the supply agreement to the proposed Townsville plant.

As a result, the two parties have executed a non-binding Memorandum of Understanding to supply pilot gas from Sapphire to the Node 3 compressor station within the MGP.