Blue Energy is investigating the feasibility of developing a gas-fired power station on its Bowen Basin tenements near Nebo.

The site under consideration is close to the high-voltage transmission line linking Gladstone and Townsville, the major power arterial for the Mackay and Townsville regions.

“Discussions are being undertaken with energy regulators to establish the requirements for access to the network in both the Glenden and Nebo areas,” the company said in a report to the ASX today.

“Discussions are also underway with potential electricity off-takers and equipment manufacturers to gauge equipment size, scalability and connection requirements.”

The company had previously been looking at developing a smaller-scale power project on an exploration site near Glenden, Blue Energy managing director John Phillips said.

“Then I got thinking, one of our other areas near Nebo – it’s about 10km away from the Nebo substation, which is where the big 275kV line comes through from Gladstone to Townsville – that is probably much better-positioned to take a bigger load and use a bigger quantity of gas which we have more certainty around,” Mr Phillips said.

The scale of the plant (proposed for PL1036) is yet to be determined and Blue Energy expects to team peaking gas turbines with solar generation.

Local solution to East Coast shortage

The company is also looking at sending gas to the southern market and has long argued that developing the northern Bowen Basin gas resource provides the quickest solution to the East Coast gas supply shortages.

“All that is required is a 450 km pipeline connection,” Mr Phillips said.

His comments came as the Federal Government and NSW today announced a $2 billion energy deal which will require NSW to free up massive amounts of gas for domestic use in return for the construction of new interconnectors, the underwriting of new non-coal power generation, and funding for emissions reduction projects.

Blue Energy has an MOU with major gas infrastructure developer APA to investigate the pipeline route options from Moranbah in the Bowen Basin to the southern gas market (ie Wallumbilla via existing APA gas pipeline infrastructure).

The company said this agreement had been extended with the view to considering a modified alignment which incorporated the existing Blue Energy gas in the Bowen Basin, potential gas supplies from the Galilee Basin to the west, and a more direct route to the domestic market in the south.

Blue Energy also plans to send its gas north to Townsville, where it has an agreement to deliver as to the TECH battery chemicals plant proposed by Pure Minerals subsidiary Queensland Pacific metals.

Blue Energy says the broader Northern Bowen Basin Gas Province has a discovered resource of about 15,000 PJ of gas which would be 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 3,248 PJ+.