Aspiring gas producer Blue Energy (ASX: BLU) has announced its support of the federal government’s National Gas Infrastructure Plan (NGIP) for new gas supply from basins in Queensland and the Northern Territory, saying it aligns with the company’s assets and drilling plans.
The 2021 NGIP report, released before the weekend, identifies a long-term development pathway for gas supply and infrastructure over the next 20 years. It highlights priority actions required to alleviate forecast southern gas supply shortfalls as well as ways to keep costs lower and internationally competitive.
The report identifies the North Bowen, Galilee and Beetaloo basin infrastructure as priorities – all areas in which Blue Energy has assets.
It also expects the first indicative gas production to the southern market from the North Bowen Basin in 2025, which aligns with Blue’s existing contractual commitments with Origin Energy (ASX: ORG) and Energy Australia for domestic gas delivery to Wallumbilla.
In addition, the report supported the construction of a 200 terajoules per day multi-user pipeline from the Bowen to Wallumbilla and identified the joint feasibility study currently being conducted by the Queensland and federal governments.
NGIP aligns with Blue’s North Bowen drilling plans
Blue has previously announced an appraisal program including a 2P reserve build drilling and testing program within its 100%-owned permit ATP 814P.
This work is expected to underpin non-binding gas supply heads of agreements that were signed with Origin, Energy Australia and Queensland Pacific Metals over the past year.
The company expressed its delight in the synergies between its appraisal program and the NGIP.
“Blue’s 2P reserve build program will underpin the economics of constructing the Bowen gas pipeline that is needed between Moranbah and the Wallumbilla interconnect. Blue is pleased to see the federal government, through the NGIP, demonstrating its support of this critical gas infrastructure,” it stated.
Blue said it will also participate in the non-binding expression of interest process which opened with the federal government on Monday.
Blue managing director John Phillips said the company is pleased to see the strong support by the federal government for new natural gas supply and infrastructure, targeting the very gas basins where it has significant exploration assets, existing gas reserves and large established gas resources.
“Planning is well advanced for Blue’s appraisal program drilling in ATP814P, which the NGIP notes is an integral part of accelerating the North Bowen gas supply,” he added.
“Well design is nearing completion, following which long lead items can be ordered and the rig selection process can commence.”
The critical importance of natural gas for Australia
Blue also praised the government’s support of the accelerated delivery of critical projects in the report, noting how federal energy minister Angus Taylor highlighted the critical importance of natural gas to meet Australia’s needs around food production, manufacturing, industry, exports and energy.
“Mr Taylor notes the dire European gas supply situation and price impacts and the importance of unlocking new gas supply for the Australian east coast as Bass Strait supplies decline rapidly,” the company added.