In a significant development on the clean energy frontier, Pilot Energy and Samsung C&T Corporation Engineering & Construction Group have joined forces through a non-binding MoU to spearhead the Mid West Clean Energy Project (MWCEP) in Western Australia.

Pilot Energy (ASX:PGY) and Samsung C&T are poised to collectively advance and finance the MWCEP, leveraging their respective participating interests, after executing a non-binding, conditional memorandum of understanding.

In a strategic move, Samsung C&T will, subject to the conditions, acquire a 20% participation interest in the MWCEP, have the rights to act as the engineering, procurement, and construction (EPC) contractor for the Clean Ammonia Project, and work to facilitate the export of clean ammonia to Korea.

Samsung C&T is a Korean multinational corporation renowned for its expertise in engineering, procurement, construction, and diverse renewable energy projects, ranging from solar and wind farms to clean hydrogen and ammonia production.

The partners will form new joint venture companies to progress the CO2 storage and Ammonia aspects of the MWCEP.

Consideration will be paid to Pilot by CHCCS Co (a new to be incorporated joint venture project entity) at financial close which is based on historical construction costs of the Cliff Head oil project which forms the foundation assets for the MWCEP

However, these considerations are subject to an agreed minimum financial return determined by the CHCCS Project’s financial modelling.

The MoU is contingent on several factors, including the declaration of a Greenhouse Gas Storage Formation over the WA-31-P area by the National Offshore Petroleum Titles Administrator (NOPTA), the successful completion of the integrated project pre-FEED study, and final board approvals from both parties.

Pilot is very close to securing approval from the Australian government controlled NOPTA after the clean energy trailblazer became the first in Australia to lodge a submission seeking regulatory approvals for an offshore CCS project under legislation that has been in place since 2006.

Pilot cleared another hurdle towards the development of the CCS project back in July when it announced it would acquire the remaining interest in the project from partner Triangle Energy (ASX:TEG).


Australia-Korea synergy

Pilot Energy chairman Brad Lingo says Samsung C&T’s participation is an important step due to the additional technical expertise and financial muscle the partnership would bring to ensure the successful development of the MWCEP.

“Furthermore, it continues the strong partnership and ongoing trading relations between Australia and Korea,” Lingo noted.

Meanwhile, chairman of the Australian Chamber of Commerce in Korea, Ross Gregory, commended the partnership as an exciting opportunity for both parties to collectively progress the MWCEP.

He stressed the importance of fostering collaboration between Australia and Korea on crucial clean energy transition projects.


Holistic approach to clean energy

The MWCEP, encompassing carbon capture and storage and hydrogen and ammonia production, represents a holistic approach to clean energy development in Australia.

The first stage of the project involves converting the depleted Cliff Head offshore oil field into a permanent CO2 storage operation capable of storing over 1 million tonnes per annum (Mtpa) of CO2 starting in 2026.

The CCS project will have over 50 million tonnes of potential total storage capacity and will allow for continuous injection through 2050.

This will enable Pilot to ultimately produce over 1.2Mtpa of low-cost, clean ammonia for export while capturing around 99% of the carbon emissions generated.

The injection capacity of Cliff Head places it within the top 10 CCS projects globally.

By combining expertise in renewable energy and carbon mitigation, the Mid West Clean Energy Project aims to reduce global emissions and promote cleaner, more sustainable energy sources.

The collaboration between Pilot Energy and Samsung C&T sets a compelling precedent for similar projects and cross-border partnerships in the realm of renewable energy and emissions reduction.


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.