Gas play Blue Energy (ASX: BLU) has welcomed Prime Minister Scott Morrison identifying the North Bowen and Galilee basins in Queensland and the Beetaloo Basin in the Northern Territory as sources of gas to be prioritised by the federal government.
The company today expressed its “delight” and said low-priced gas to consumers relies on large-scale gas developments, low operating costs, low corporate overheads, and low processing and transportation costs.
Blue Energy has positions in all the three nominated basins with certified gas reserves and resources in North Bowen (3,000 petajoules resources, 298 PJ reserves), and Galilee (838 PJ resources).
In a statement on Tuesday, Mr Morrison said this gas resource will re-establish a strong economy, making energy affordable for domestic and business users as part of Australia’s recovery from the coronavirus pandemic.
Mr Morrison pledged to re-set the east coast gas market and create a more transparent and competitive Australian gas hub by unlocking supply, delivering an efficient pipeline and transportation market, and empowering gas customers.
The federal government will set new gas supply targets for states and territories.
It will unlock five key gas basins, beginning with Beetaloo and the two Queensland basins, at a cost of $28.3 million to develop plans for the basins.
New gas trading hub in Queensland
Canberra will also establish a gas hub at Wallumbilla in Queensland to deliver a transparent gas trading system.
Other plans including reforming pipeline regulations and seeking a new payment system.
Blue Energy said it stands ready to work with domestic manufacturers and gas users that require long-term, stable gas supply. The company will also work to develop its gas resource for the east coast domestic market.
“The Prime Minister’s announcement on the North Bowen Basin is doubly satisfying as it comes so soon after the announcement by the Palaszczuk government [in Queensland] that they will invest $5 million on a pipeline route study from the North Bowen Basin to the east coast market,” Blue Energy managing director John Phillips said.
That pipeline is designed to bring 15,000 PJ of gas not yet under contract to east coast users. The volume of gas is forecast to supply the market for up to 30 years.