PERTH (miningweekly.com) – ASX-listed Blue Energy has signed a non-binding memorandum of understanding (MoU) with fellow listed Queensland Pacific Metals Energy (QPME) to potentially supply gas on an ‘as available’ basis from its Sapphire pilot to QPME’s newly acquired Moranbah gas project plant, in the Northern Bowen basin.

QPME earlier this year struck a deal with Arrow Energy Group and AGL Energy to acquire the Moranbah gas project and the North Queensland energy joint venture. The two projects, collectively known as the Moranbah project, provide QPME with an established coal mine waste gas project with 240 PJ of 2P reserve and existing infrastructure with a processing capacity of up to 30 PJ/y.

QPME said on Thursday that the MoU was consistent with the company’s objective of achieving carbon abatement by collecting waste gas from the Northern Bowen basin that would otherwise end up in the atmosphere, and diverting it to productive industrial use.

“This opportunity with Blue is one of several near-term opportunities which QPME is working on to get cost-effective gas into the Moranbah infrastructure system to increase overall production. As soon as we take control of the Moranbah project, we plan to execute and implement these opportunities expeditiously,” said QPME CEO David Wrench.

Blue Energy told shareholders that the transaction provided the company with a simple path to the commercialising of its pilot gas flow from the appraisal pilot well production testing activities being currently conducted at Sapphire.

“Blue is delighted to be able to offer our pilot gas to QPME in the near term on an as-available basis. This will ensure pilot gas produced by Blue is fully utilised and can assist QPME in meeting its gas supply targets on becoming the new owner of the Moranbah gas project,” said Blue MD John Phillips.

“It allows Blue a very cost-effective path to bringing more new gas supply into the domestic market, efficiently, cost effectively and in a timely manner. Blue looks forward to working constructively with QPME to fully realise the potential of the North Bowen basin gas resource.”

Engineering works will commence shortly to establish the mechanics and logistics of tie-in points and transfer points for the delivery of the gas.