New pipeline mulled for Blue Energy’s Bowen basin gas project

PERTH (miningweekly.com) – Energy infrastructure group the APA Group has signed a nonbinding memorandum of understanding with ASX-listed Blue Energy to negotiate a gas transportation agreement for Blue Energy’s gas resources in the Bowen basin, in Queensland, to the east coast gas market.

APA on Tuesday reported that it would work with Blue Energy to explore the development of new pipeline infrastructure and other related mid-stream infrastructure required to bring these new gas resources on line.

“As an energy infrastructure provider, APA has been, and will continue to be, part of the solution of getting more gas into the market to put downward pressure on the price of gas to consumers. We continue to work collaboratively with existing and new customers in providing innovative new gas transportation services, and we are pleased to be working with Blue Energy in their Bowen basin project,” APA MD Mick McCormack said.

“The interconnected nature of APA’s east coast grid enables potential new producers, such as Blue Energy, to explore opportunities to market their gas."

Blue Energy currently has around 3 000 PJ of gas resources along with 71 PJ of 2P reserves and 298 PJ of 3P reserves in the Bowen basin, which could be traded between Townsville and Hobart using APA’s east coast grid, said Blue Energy MD John Phillips.

The resource is spread over the Bowen and Comet Ridge’s Galilee projects, and developed independently or symbiotically, these projects would result in the development of about 750 km of greenfield transmission pipeline and compression facilities for a total investment of in the order of A$800-million.

Phillips added that further negotiations with APA were expected to yield detailed design and preferred route options, along with cost estimates, and could ultimately result in the construction of new pipeline infrastructure.

“With the successful conclusion of these steps and project approval and final investment decision, APA will become builder, owner and operator of the new infrastructure.”

Any investment will be subject to the satisfaction of a number of conditions, including gas resource certification, gas supply and transportation agreements and final board approvals.

“APA’s east coast grid is the only one of its kind in the world and enables large and small producers alike to respond to price signals and get more gas supply to markets across the eastern states,” McCormack said.

“Significant investments like these require incentives to invest and the certainty of the rules around those investments for both the pipeline and customers alike,” he added.