Pilot announces consortium to advance blue hydrogen study in WA

Pilot Energy (ASX:PGY) is advancing its hydrogen ambitions with the formation of a consortium to jointly undertake and fund the feasibility study for the Mid West Blue Hydrogen and Carbon Capture and Storage project.

The consortium includes heavyweight gas infrastructure major APA Group (ASX:APA), which will also provide the expertise for the infra component of the project.

Pilot will bring its carbon management expertise to the table while Warrego Energy (ASX:WGO) will deliver natural gas supplies.

The feasibility study is scheduled for completion in the first quarter of next year.

The update follows a flood of hydrogen announcements from various state governments this week.

Pilot said the feasibility study will focus on blue hydrogen technology, regional CCS potential, hydrogen markets, project infrastructure and commercialisation.

The company will also carry out a standalone assessment of the Cliff Head project’s CCS (carbon, capture and storage) potential, relating to assumptions underpinning the potential carbon dioxide injection rate and CO2 storage capacity.

Previous pre-feasibility screening of the Cliff Head oil field’s potential for CCS had indicated that it could sequester about 500,000t per annum of CO2 for 13 years at an injection cost of about $16/t of CO2, using the existing onshore and offshore infrastructure.

“The consortium represents an exciting evolution of Pilot’s business plan with the participation of key Australian energy industry participants supporting Pilot’s feasibility studies and vision for the Mid West Blue Hydrogen project,” executive chairman Brad Lingo said.

“Pilot looks forward to working with the Consortium and subject to the Feasibility Study, progressing towards the development stage and ultimate delivery low cost and meaningful volumes of clean hydrogen into the Mid West region as part of Western Australia’s energy transition.”

After two days of solid gains, shares in PGY fell by around 15% in morning trade.

Blue Hydrogen feasibility studies

Pilot’s feasibility studies are designed to assess blue hydrogen and CCS projects that can integrate with its oil and gas assets and existing infrastructure, to deliver competitive clean energy.

Selected development projects identified by the studies will form the basis for future FEED studies, partnering and other corporate initiatives.

Future infrastructure projects may include a CO2 pipeline and injection facility, blue hydrogen plants, CCS sites, offshore and onshore wind, solar, renewable hydrogen plant, substation, transmission lines and hydrogen pipelines.

For the Mid West Blue Hydrogen and Carbon Capture and Storage project, the JV has engaged two international feasibility contractors – Genesis and Technip Energies – to assist with the Feasibility Study and may contract further external assistance to complete the study.

Genesis will manage the Feasibility Study and prepare the overall study report while Technip Energies will use its hydrogen expertise to complete an assessment of blue hydrogen production technologies and hydrogen markets.

The Feasibility Study will be conducted over a 6-month period. Key outcomes of the study will include detailed description and assessment of development projects, levelised cost of hydrogen and CO2 management services.