Balmora Blue is an illicit substance much like Skooma that can be found during the Thieves Guild quest The Dainty Sload. It is planted in a footlocker belonging to the captain of the ship.
Background
Balmora Blue is one of the few alcoholic beverages banned in Skyrim. The drink comes from Morrowind; specifically, the city of Balmora. Not much is known about it except that Moon Sugar is used to create it, and other ingredients are added to increase its potency.
Location
The bottle can be found underneath docks by the Red Wave in Solitude. Sabine Nytte owns the chest it's hidden in, and will sell the key for 1,500 
. She can also be pickpocketed for the key, or the chest can be picked (Expert).
Trivia
- After completing The Dainty Sload quest, it's possible to venture back to the Dainty Sload and retrieve the bottle of Balmora Blue from the chest it was planted into. It will not be considered a stolen item and can be sold anywhere.
- Despite the fact that Balmora Blue is considered very rare and described as "beyond priceless," it has a base value of 68
. - Even though Erikur says anyone caught with Balmora Blue will face jail for a long time, keeping it will not result in being arrested.
- The chest in which the Balmora Blue is located will only appear while the quest The Dainty Sload is active.