Australia's Blue Energy pens gas supply MoU

Blue Energy, an ASX-listed company, on June 8 announced the signing of a non-binding memorandum of understanding (MoU) with Queensland Pacific Metals Energy (QPME) for the supply of gas on an "as available" basis to QPME's recently acquired Moranbah gas project plant in Moranbah, Queensland. 

According to the MoU, the parties have agreed to negotiate and enter into a gas supply agreement from the Sapphire pilot test wells. QPME acquired the Moranbah gas project and other assets from the Arrow AGL joint venture and will now operate the plant.

This agreement allows Blue Energy to commercialise its pilot gas flow from the ongoing appraisal pilot well production testing activities in the Sapphire block. The Sapphire block, located near QPME's low-pressure gas gathering system, is part of Blue Energy's ATP 814 coalbed methane (CBM) field in Queensland's North Bowen Basin.

The MoU also sets the stage for Blue Energy to develop its gas reserves to supply QPME's previously announced gas supply MoU for their nickel refinery project in Townsville. Blue Energy and QPME's parent company, Queensland Pacific Metals (QPM), have an existing MoU for the supply of 7 petajoules/year of gas over 15 years to the Townsville refinery.

Engineering works will soon begin to establish the necessary infrastructure, including tie-in points and transfer points, for the delivery of gas from Blue Energy to QPME's Moranbah gas project plant.

It's worth noting that Blue Energy recently completed a drilling programme in the Sapphire block, which involved drilling approximately 14,000 m of hole, with around 8,000 m in horizontal sections, as part of their CBM project.