Pilot Energy isn’t wasting any time on delivering what will be Mid-West Western Australia’s first operating offshore carbon capture and storage (CCS) project, with the company having now engaged key consultants to move the project forward.

Pilot Energy (ASX:PGY) has signed on five new key partners to successfully execute on the three-stage clean energy project in Western Australia’s Mid-West that will start with utilising existing oil and gas infrastructure to build one of the state’s most significant offshore carbon reduction projects.

CO2Tech – the commercial arm of the Australian CO2 Cooperative Research Centre – has been engaged to assist Pilot with securing regulatory approvals for the stage 1 CCS project, while leading energy research house Reputex will assist in the commercialisation of carbon credits.

Pilot has also engaged boutique firms Miro Capital and Bridge Street Capital to assist with asset valuation and partnering, and project financing, respectively, for the three-stage project.

Lastly, Poten & Partners will lend its expertise to assess the Asian ammonia market and assist with commercialisation opportunities.

The CCS project is being developed leveraging the region’s existing underground CO2 storage capacity, natural gas, and infrastructure already in place at the Cliff Head oil project.

Pilot and partner Triangle Energy (ASX:TEG) agreed to a significant restructure of the Cliff Head JV last month that provided a clear development pathway for the CCS project.

On completion of the deal, Pilot’s direct interest in both the Cliff Head oil and CCS projects will increase to 57.5% from a 21.25% direct interest currently.

CCS taking off in Australia

The activity surrounding CCS in Australia is ramping up quickly, with Prime Minister Scott Morrison making it one of its key election commitments.

At the same time, peak industry bodies like the Australian Petroleum Production and Exploration Association are seeking to expand their expertise in the field with the appointment of former head of the International Energy Agency’s Carbon Capture, Utilisation and Storage (CCUS) Unit.

Pilot said the conversion of the Cliff Head oil field from oil production to CCS would be the launch pad for delivering low-cost clean energy.

Feasibility studies completed in March confirmed the Cliff Head offshore oil field and associated infrastructure was ideally suited for a medium-scale CCS project, designed to capture and store up to 1 million tonnes of CO2 per annum at an initial injection rate of around 500,000 tonnes each year.

The project will provide up to 16 million tonnes of permanent CO2 storage and will fully utilise the existing onshore and offshore facilities on a continuing basis for at least the next 20+ years.

Meanwhile, stage 2 of Pilot’s larger clean energy project will see the addition of the blue hydrogen production component, while stage 3 will expand the project to include ammonia production.

Pilot Energy
Mid-West Clean Energy Project (Stages 1 to 3)

Ammonia is not as widely publicised as hydrogen, but like CCS it too is becoming a bigger focus for the energy industry.

Earlier this year, China took delivery of its first vessel capable of being converted to run on ammonia or LNG. The shipping industry is looking to ammonia as a preferred fuel because it doesn’t need to be stored in high-pressure tanks and has 10x the energy density of a lithium-ion battery.

It has also caught the eye of global oil giants BP and Woodside. BP is reportedly taking a 30% stake in the Asian Renewable Energy Hub in the East Pilbara that will generate 26 gigawatts of wind and solar electricity to produce green hydrogen and ammonia, while Woodside is considering options for hydrogen and ammonia production closer to Europe.

Full steam ahead

Pilot anticipates it will be in a position to submit its application to have the Cliff Head project declared a Greenhouse Gas Storage Resource by Q3 this year.

That would then pave the way for the securing of regulatory approval in either the final quarter of 2022 or Q1 2023, which is when Pilot and Triangle anticipate the completion of the Cliff Head restructure.

Pilot said it expects to build the team further over the coming months in preparation for stage 1 Cliff Head CCS front-end engineering and design work and initiating ammonia offtake discussions.




This article was developed in collaboration with Pilot Energy, a Stockhead advertiser at the time of publishing.


This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.