Blue Energy secures AGL sales deal to boost east coast gas supply

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By Colin Hay - 
Blue Energy ASX BLU AGL gas deal Bowen

Blue Energy (ASX: BLU) has achieved a significant breakthrough with the signing of a non-binding heads of agreement (HoA) with leading Australian energy utility AGL Energy (ASX: AGL).

The HoA is for the supply of up to 300 petajoules of gas deliverable at Wallumbilla over ten years from Blue Energy’s Northern Bowen Basin ATP814 coal seam gas licence in Queensland.

Blue Energy managing director John Phillips said the HoA represents another foundation gas volume that will contribute to the underpinning of the proposed gas pipeline from the North Bowen Basin into the Wallumbilla “hub” and for the development of Blue Energy’s gas resources and the broader North Bowen Basin generally.

“It is vital that significant long-term future gas offtake from Blue’s North Bowen tenure is secured to enable the large gas resources identified in the North Bowen Basin to be connected to the the east coast market,” Mr Phillips said.

“Domestic gas users face potential future shortfalls in supply as the traditional Bass Strait fields continue to decline and a new gas pipeline connection of the large North Bowen Basin gas resources to the east coast market will provide long-term abundant, reliable gas supply which will help alleviate increases in wholesale gas pricing and assist in the bolstering of the reliability of the expanding renewable energy grid and pursuit of a lower emission energy grid.”

Plentiful reserves

Blue Energy’s 100%-owned ATP814 permit has been independently assessed to contain more than 3,619PJ of recoverable gas.

Blue also currently has additional reserves in close proximity to the existing gas field infrastructure in the North Bowen Basin.

The company recently lodged applications under the $21 million Queensland government Frontier Gas Exploration grant program to conduct new exploration drilling in the permit.

Sapphire development

Blue Energy is currently progressing the Sapphire Pilot project in the Bowen Basin.

Located within the PL 1034 production licence application area, Sapphire is immediately adjacent to the Moranbah gas project (MGP), a producing gas field recently acquired by Queensland Pacific Metals Energy (QPME).

Blue Energy has an existing non-binding memorandum of understanding (MoU) to supply gas to the proposed Queensland Pacific Metals Energy (ASX: QPM) (parent entity to QPME)-owned nickel refinery in Townsville.

Blue believes there is an opportunity for it to utilise MGP infrastructure to fulfil the supply agreement to the proposed QPM Townsville plant.

Blue and QPME have also recently executed a non-binding MoU to supply pilot gas to the MGP from the Sapphire Pilot via a proposed pipeline from Sapphire to the Moranbah gas field.

Blue recently reported that the Sapphire pilot project continues to flow gas at low rates from the Sapphire 6L3 and Sapphire L4 laterals.

In the meantime, the company has been wrapping up maintenance work to repair a hydraulic pumping unit on the Sapphire 5 laterals and vertical water production well.