Coal seam gas producer Blue Energy (ASX: BLU) and battery metals project developer Queensland Pacific Metals (ASX: QPM) have entered into a non-binding Memorandum of Understanding (MOU) to leverage gas currently being flared in a pilot well program. The MOU outlines a strategic plan to supply gas to Queensland Pacific Metals’ Moranbah Gas Project (MGP) plant and potentially fuel their TECH battery metals development project in Townsville. This collaboration represents the first step in a growing partnership between Blue Energy and Queensland Pacific Metals for the development of gas reserves in the North Bowen Basin.
Utilising Flared Gas for Moranbah Project
Gas that is currently being flared as part of a government-approved pilot test program will now be redirected to supply the Moranbah Project from Blue Energy’s nearby Sapphire Block PL 1034. This initiative aims to make use of the wasted gas and provide a cost-effective solution to meet Queensland Pacific Metals’ gas supply targets as the new owner of the MGP. Additionally, the gas sourced from Blue Energy may also support Queensland Pacific Metals’ TECH battery metals development project in Townsville.
Strengthening Collaboration for Gas Reserves
Building upon their existing MOU, Blue Energy and Queensland Pacific Metals are expanding their collaboration to develop gas reserves in the North Bowen Basin. Under the previous agreement, Blue Energy committed to supplying 7 petajoules (PJ) per annum of gas over 15 years to Queensland Pacific Metals’ Proposed Nickel Refinery in Townsville. The new MOU further strengthens the partnership and enables Blue Energy to monetise the pilot gas through the ongoing pilot campaign at Sapphire Block permit ATP 814.
Progress in Pilot Testing and Reserve Assessment
Blue Energy has reported increasing gas flow at the Sapphire Pilot program, with rates rising from 100,000 cubic feet per day (cfd) to 140,000 cfd. The pilot well drilling and production testing campaign aims to upgrade Blue’s Sapphire gas reserve base by converting 3C resources to 2P reserves. Geological data collected during the drilling phase will contribute to an independent reserve assessment conducted by Netherland Sewell and Associated Inc of Dallas (NSAI). This data, along with flow rate information, will inform the assessment of the potential size of future Sapphire Field Development.
Waste Gas Repurposed for Industrial Use
Queensland Pacific Metals CEO David Wrench highlights the MOU’s alignment with the company’s objective of redirecting waste gas from the North Bowen Basin to productive industrial applications. By harnessing this gas through collaboration with Blue Energy, Queensland Pacific Metals aims to increase overall production by efficiently utilising the Moranbah infrastructure system. The acquisition of the Moranbah Gas Project and the North Queensland Energy Joint Venture provides an opportunity to leverage an established coal mine waste gas project with significant reserves and infrastructure that can support the TECH battery materials refinery project in Townsville.
Funding Support and Project Development
Queensland Pacific Metals recently secured AUD 5 million from the Australian Federal Government’s Critical Minerals Development Program, supporting the acceleration of Front-End Engineering Design for the TECH project. Lead engineers Hatch will undertake this crucial design phase for the battery materials refinery, which will process high-grade laterite ore from New Caledonia to produce nickel sulphate, cobalt sulphate, and other valuable co-products.
In summary, the collaboration between Blue Energy and Queensland Pacific Metals to utilise pilot gas for new projects showcases a strategic approach to optimise gas resources and support sustainable industrial development. This initiative aligns with Queensland Pacific Metals’ aim to utilise waste gas and contributes to their TECH project’s advancement in becoming a leading battery materials refinery. By tapping into untapped gas reserves and repurposing waste gas, these companies are driving innovation in the energy and battery materials sectors.
