Sapphire Project Gains Licence for 117 Wells and 91 PJ 2P Gas Reserves
Blue Energy’s subsidiary Eureka Petroleum has been granted a 20-year production licence for the Sapphire gas project, enabling development of substantial certified gas reserves adjacent to existing infrastructure.
- 20-year Production Licence PL 1034 awarded for Sapphire project
- Up to 117 wells approved to develop 91 PJ (2P) and 287 PJ (3P) gas reserves
- Project located near Moranbah gas facilities, avoiding new processing construction
- Environmental studies mandated to protect regional aquifers
- Reserve estimates certified by Netherland Sewell and Associates remain unchanged since 2023
Licence Award Advances Sapphire Gas Development
Blue Energy Limited (ASX, BLU) has taken a significant step forward in its natural gas ambitions with the granting of Production Licence PL 1034 over its 100% owned Sapphire project. The licence, awarded to Blue’s wholly owned subsidiary Eureka Petroleum Pty Ltd, spans 20 years and authorises drilling of up to 117 wells. This milestone formalises the company’s ability to develop the substantial gas reserves identified within the coal seams of the Permian-aged sequence in the region.
Substantial Certified Reserves Ready for Development
The Sapphire project holds an estimated 91 petajoules (PJ) of 2P (proven and probable) reserves and 287 PJ of 3P (proven, probable, and possible) reserves, as independently certified by Netherland Sewell and Associates Inc (NSAI) in Dallas. These figures, last confirmed in October 2023, remain unchanged, underscoring the project’s robust resource base. The licence approval enables Blue Energy to proceed under its existing development plan, unlocking these reserves through a carefully staged drilling program.
Strategic Location Minimises Infrastructure Needs
Strategically, the Sapphire licence area is situated immediately adjacent to existing production licences and gas processing facilities at Moranbah in Central Queensland. This proximity means Blue Energy can leverage existing infrastructure, avoiding the capital-intensive construction of new gas processing plants. Such integration is expected to streamline project development and reduce upfront costs, potentially accelerating the timeline to production.
Environmental Safeguards in Place
While the licence grants operational freedom, it comes with environmental responsibilities. Under an amended Environmental Authority, Blue Energy must complete several studies to gather regional aquifer data and conduct modelling to ensure that local and regional water bores remain unaffected by drilling activities. This requirement reflects growing regulatory and community expectations around sustainable resource development, and the company’s commitment to responsible operations.
Looking Ahead
With the production licence secured, Blue Energy is positioned to advance its development plans for the Sapphire project, potentially adding meaningful gas supply to Queensland’s energy mix. The next phases will focus on completing environmental studies and initiating drilling activities, milestones that will be closely watched by investors and industry observers alike.
Bottom Line?
Blue Energy’s licence award sets the stage for unlocking significant gas reserves, but environmental approvals will shape the pace of development.
Questions in the middle?
- When will Blue Energy commence drilling under the new licence?
- What are the potential impacts of environmental study outcomes on project timelines?
- How will leveraging Moranbah’s existing facilities influence project economics?
