Blue Energy welcomes Queensland Government’s acknowledgement gas is vital to state’s energy mix

Blue Energy (ASX: BLU) has welcomed the Queensland Government’s Energy and Jobs Plan that was unveiled this week and acknowledges the vital role of natural gas in the state’s energy requirements.

Additionally, the state government’s plan outlines connecting the Bowen Basin gas field to the east coast market.

This would provide east coast industry with a “reliable and long-term” gas supply from the basin.

According to Blue, the Queensland Government’s energy plan complements an ongoing study in collaboration with the Australian Government regarding new gas pipeline options to bring the already discovered Bowen Basin gas resource to market.

The north Bowen Basin is estimated to host about 15,000 petajoules in gas resources, which is enough to meet 30-years of east coast demand.

Sapphire Block appraisal program

Blue says the federal and state government plans are positive for its strategy of supplying gas from its ATP-814 in the north Bowen Basin.

ATP-814 has about 3,000PJ in gas resources, which is enough to meet eight years of east coast requirements.

Blue is currently carrying out a well appraisal program at the Sapphire Block within ATP-814.

Earlier this week, Blue announced the third lateral well Sapphire 5L3 of the program had been successfully drilled 1,350m into the target coal seam and also intersected the Sapphire 5V vertical well as planned.

The rig is now drilling the fourth lateral well Sapphire 5L4, which is also the final of the Sapphire 5 well set.

Sapphire 5L4 is being drilled 1,650m in-seam and is also planned to intersect Sapphire 5V.

Each pilot well set includes up to four lateral wells that access individual coal seams. These wells also intersect the single vertical well, which acts as the water producer.

The vertical water producer well enables the lateral ones to meter and measure the gas flow from each individual coals seam – allowing better allocation of seam specific reserves.

East coast gas market

Blue pointed out providing the east coast market with new gas supply will put “fundamental downward pressure” on surging gas prices.

It will also allow critical industries like fertiliser manufacturing to secure long-term reliable feedstock to supply Australia’s agriculture sector.

“A current global shortage of fertiliser is impacting global food production which will impact many countries in the coming months and years,” Blue noted.

The Queensland Government’s energy plan also paves the way to build a 200MW gas-fired electricity generation plant to cover peak energy demand as the state retires its publicly owned coal fired electricity generation fleet by 2035.

It is expected the new 200MW plant will provide back up supply for Queensland’s super grid.