Pilot Energy Receives Commitments That Will Raise $2.4M; Welcomes Samsung C&T

Pilot Energy Receives Commitments That Will Raise $2.4M, Welcomes Samsung C&Tv - Carbon Herald

Pilot Energy – the Australian junior oil and gas exploration and production company, pursuing diversification and transition to the lower-carbon economy through the development of Australia’s first offshore carbon capture and storage project, has recently announced two major developments in relation to the Cliff Head CCS Project.

The company welcomed Samsung C&T who joined Pilot Energy as a Joint Development Partner in the Mid West Clean Energy Project (MWCEP) in Australia. The Mid West Clean Energy Project includes the conversion of the Cliff Head Oil field and associated infrastructure from oil production to a carbon capture and storage (CCS) site. That is considered the first stage of the project, expected to become operational by 2026.

Relevant: “The Cliff Head CCS Project Aims To Be The First Operational Carbon Capture And Storage Facility In West Australia” – Pilot Energy Chairman Brad Lingo

The project is targeting the production of 1.2 million metric tonnes per annum (mtpa) of low/zero carbon ammonia from 2027 from a combined green and blue hydrogen production facility with fully integrated carbon capture. Over 1 million tonnes per year of CO2 is expected to be stored from the ammonia production starting in CY2026. 

Apart from supporting MWCEP, the Cliff Head CCS Project also intends to provide carbon capture and storage to third-party emitters.

According to Brad Lingo, Chairman of Pilot, the participation of Samsung C&T is an important step in the development of the project, as the company can provide additional technical expertise and financial strength.

Relevant: Pilot Energy To Acquire Triangle’s Interest In Cliff Head Oilfield JV

Ross Gregory, Chairman of Australian Chamber of Commerce in Korea, commented that the partnership further demonstrates the continued strong collaboration between Australia and Korea on important clean energy transition projects.

As per the agreement, Samsung C&T will acquire a 20% stake in the MWCEP and have rights to act as the EPC contractor for the clean ammonia project. It will aim to arrange for clean ammonia offtake for export to Korea. The agreement is described as a ‘non-binding, conditional MOU’ in relation to the development of the Cliff Head CCS Project (CH CCS) and the Clean Energy Ammonia Project (collectively known as the MWCEP).

Australia Released A $250 Million Carbon Capture Investment - Carbon Herald
Credit: xtock | Shutterstock

The conditions for reaching a MoU between the two companies include the National Offshore Petroleum Titles Administrator (NOPTA) declaring a Greenhouse Gas Storage Formation over the WA-31-P area, completion of the integrated project pre-FEED study, and final approval from the board of each party.

Around $67 million will be paid to Pilot Energy by CHCCS Co – a new, to be incorporated, joint venture project entity. That sum is based on the historical construction costs of the Cliff Head oil project.

On November 6th, Pilot Energy (ASX:PGY) made another announcement, highlighting high interest in the carbon capture and storage project from institutional investors in Australia. The company was approached by a small group of investors and has received commitments for a placement to raise $2.4 million.

According to the announcement, under the terms of the placement, Pilot will issue 121.2 million fully paid ordinary shares to sophisticated and professional investors and Directors at an issue price of $0.02 per Share to raise $2.424 million (before costs). The Directors of the company have also elected to participate in the capital raise. 

Credit: Pilot Energy press release.

As part of the placement, the company will issue one new unlisted option (Placement Options) for every four new Shares issued to investors, resulting in a total of 30.3 million new unlisted Placement Options being issued. The Placement Options will expire on 25 August 2025 and have an exercise price of $0.033. The issue of the Placement Options is subject to approval from Pilot’s shareholders at the Annual General Meeting scheduled to be held in February 2024.

The capital raise will assist with funding for the Mid West Clean Energy Project, with an immediate focus on progressing the integrated project pre-FEED study, ensuring regulatory approvals and general working capital for corporate/ professional overheads. The funding will significantly support the capabilities of the company.

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