BLUE Energy Limited has signed an MOU with North Queensland Gas Pipeline (NQGP) owner Palisade Investment Partners to facilitate bringing new domestic gas supplies into the strong Townsville market through the NQGP.

As part of the MOU, both parties will market Blue Energy’s Northern Bowen Basin gas reserves in the Sapphire Block, which is located in close proximity to the NQGP and also the agreement will seek to obtain access to the existing Moranbah Gas Project (MGP) and gas processing facilities.

This MOU will expedite the supply and delivery of new affordable domestic gas to North Queensland gas users (and facilitate the development of the Sapphire reserves), who are seeking to secure long-term reliable and affordable domestic gas supply as a primary energy source or as feedstock for manufacturing.

Blue Energy Chairman, Mr John Ellice-Flint, said it was pleasing to be able to develop this opportunity to bring new domestic gas supplies to market given the Australian Energy Market Regulator (AEMO) forecast of gas shortages for the east coast domestic market, together with price escalation.

“The development of new domestic gas supplies to North Queensland will deliver regional economic growth opportunities through new industries such as the Imperium3 Townsville consortium’s proposed $3 billion 18 GWh lithium-ion battery cell manufacturing facility in Townsville,” Mr Ellice-Flint said.

“Imperium3 Townsville recently completed a Feasibility Study which has been submitted to the Queensland Government. With the potential re opening of Queensland Nickel at Yabulu in Townsville both projects will require substantial domestic gas supplies.

“Thousands of new jobs in North Queensland depend on reliable and affordable domestic gas supplies over the next 30 years and Blue Energy is determined to play a major role in supplying domestic gas to meet this demand. The royalties paid on domestic gas production flow to the Queensland Government.”

New domestic gas supply for the Townsville market would initially be drawn from Blue Energy’s ATP-814-P Sapphire Block which has been independently assessed to contain nearly 216 PJ of 3P reserves and a further 186 PJ of Contingent Resource, and is located only 12 km from the existing Moranbah Gas Project gas processing facilities and less than two km from gas field gathering infrastructure.

The broader Northern Bowen Basin Gas Province has a discovered resource of approximately 15,000 PJ of gas which is sufficient to underpin the east coast domestic gas market for the next 30 years, based on current market conditions.

Blue’s component of this estimate is currently 3,248PJ. Development of this Basin-wide resource and a single large diameter multi- user gas trunk line connection to the south would provide security of supply for east coast manufacturers and with this additional supply, will put downward pressure on prices. The additional gas availability would also generate the expansion of industry in the greater North Queensland region.

In this regard, Blue has received Queensland Government approval of the Pipeline Survey Licence 2037 from ATP-814-P to the Wallumbilla connection near Rolleston and is progressing this option.