Blue Energy Targets New Licences as East Coast Gas Supply Crisis Looms

Blue Energy (ASX: BLU) is preparing to appraise two newly granted potential commercial area (PCA) gas licences as it ramps up efforts to supply the energy-hungry east coast market.

Earlier this month the company was awarded PCAs 336 and 337 and had its ATP 814 exploration permit renewed for a further term, with each an important ingredient in Blue’s plans to meet the growing gas demand.

Located within the company’s ATP 814 permit in central Queensland, the PCAs contain a combined 1,042 petajoules of recoverable gas and the company is working with the government to help with permitting to progress their assessment.

Sapphire Block Issues

The company is also in close discussions with Queensland officials as it works to progress the grant of a petroleum lease over its Sapphire block.

After a two-year court case, the state’s land court recently issued Blue an environmental authority over the area—a requirement in being awarded the petroleum lease.

The company is also seeking a solution to allow it to restart the Sapphire 5V and 6V gas pilot wells this quarter.

A combination of issues with surface equipment and a downhole pump mechanical problem saw Blue forced to shut down the pilot wells, with gas production from the associated lateral pilot gas wells suspended since that time.

MGP Sale Agreement

Sapphire is an important distribution component for both Blue and Queensland Pacific Minerals Energy, which have signed a non-binding agreement to supply pilot gas to the Moranbah Gas Project (MGP) via a proposed pipeline from the Sapphire location to the Node 3 compressor station within the field.

Blue Energy is also targeting the Northern Territory as a potential new gas supply opportunity, with the company pursuing a farm-in deal for a pair of exploration permits in the Greater McArthur Basin.

Having now completed the first four years of its work commitment to the satisfaction of the NT government, Blue is now pursuing 50% equity in the permits, which includes the drilling of a stratigraphic well in each.

Gas Shortage Looms

According to a recent Australian Competition and Consumer Commission (ACCC) report, the 2025-26 supply outlook for the east coast has deteriorated, with a number of companies downgrading their production forecasts.

The ACCC sees a potential 2PJ shortfall in the fourth quarter of 2025.

There is also a risk of shortfall throughout 2026 if the Queensland LNG producers export all their uncontracted gas.