Highlights
• Mid West Integrated Renewables and Hydrogen Project Feasibility Studies completed
• Positive Feasibility Study results has Pilot in a strong position to develop clean energy projects to produce hydrogen and renewable energy on a globally competitive basis, leveraging existing operations in Mid West region
• Feasibility Studies also highlight the Mid West region can produce clean ammonia on a globally competitive /basis for export into emerging Asian clean energy markets
• Next steps for Pilot are to progress into the permitting and approvals process and frontend engineering and design (FEED) for a staged development of commercialising CCS and blue hydrogen leveraging 8 Rivers technology
Pilot Energy Limited is pleased to provide an update on its recently completed Mid West region Feasibility Studies.
Completion of Key Clean Energy Feasibility Studies
As outlined in the ASX release of 12 August 2021, Pilot announced the commencement of key studies to assess the feasibility and economics of, and to recommend the pathway for development for a large-scale clean hydrogen production project utilizing the Company’s existing oil and gas production operations.
The transition to the production of clean hydrogen requires carbon capture and storage (CCS) and renewable power generation. Pilot is well positioned to play a significant role in the energy transition through harnessing the world-class CCS and Renewable resources of the Mid West region of Western Australia.
The Feasibility Studies for the Mid West Integrated Renewable Energy Project included the Mid West Blue Hydrogen and Carbon Capture and Storage study (CCS and Blue H2 Study) focused on the Cliff Head Oil field, the Mid West Renewable Energy Study (Renewables Study), the 8 Rivers Blue Hydrogen Technology Study (8 Rivers Study) and the WA 481P CCS Study (WA 481P CCS Study) collectively the “Feasibility Studies”).
The Renewables Study and the 8 Rivers Study have been completed. The first stage of the WA 481P CCS Study has also completed providing an assessment of the CO2 storage potential of Pilot’s 100% owned WA-481P exploration permit with estimates of both the Contingent and Prospective CO2 storage resource capacity within the permit. These estimates have been prepared in accordance with the SPE CO2 Storage Resources Management System (SPE SRMS) Guidelines.
The Company is nearing completion of the CCS and Blue H2 Study which is assessing the implementation of a CCS and Blue H2 project centred on the Cliff Head Oil Field which is expected to be completed within the next several weeks. Pilot holds a 21.25% interest in the Cliff Head Oil Field through its 50% ownership of Triangle Energy (Operations) Pty Ltd, the operator of the Cliff Head Oil Field. This CCS and Blue H2 Feasibility study is being jointly funded and contributed to by Pilot, APA Group (ASX: APA) and Warrego Energy (ASX: WGO).
Feasibility Study Results confirm viability of Mid West Clean Energy Projects
Each of these feasibility studies have confirmed the significant opportunity to develop a largescale clean hydrogen production project integrating CCS and renewable energy generation to produce hydrogen and electricity for both domestic and export markets.
Pilot Energy Chairman Brad Lingo said: “Pilot is very excited about the results emanating from the feasibility studies. The results not only show how competitive an integrated clean energy project can be in Mid West Western Australia, but also outline a clear multi-stage development path starting with carbon capture and storage and building off this platform to
produce clean power and hydrogen for the domestic market and ultimately moves into markets.”
Mr. Lingo continued: “This staged development path is very much in the reach of the Company in terms of financial capacity and technical delivery taking advantage of the existing Cliff Head Oil Field infrastructure and operations. The Company is very focussed on delivering a Firstto-Market CCS Project in the Mid West to anchor the further development of a Clean Hydrogen/ Ammonia and Renewable Energy Project.”
Mr. Lingo added: “We are very much focussed on engaging with NOPTA and the other relevant regulators to secure the necessary approvals to implement this project with an aim of having the first stage of the development pathway operational by 2025 and generating positive cash flow from these operations as well as delivering a material impact on carbon emissions in the Mid West.”
Today's announcement of the completion of the Mid West region Feasibility Studies does not commit Pilot to proceeding beyond the feasibility stage of the Mid West Clean Energy Projects and any final decisions with respect to pursuing the recommended development path outlined below will be made at the relevant time, subject to commercial and financial considerations and following consultation with ASX.
Recommended Development Pathway - Mid West Clean Energy Projects
Based on the completed studies, a recommended development pathway for the projects under consideration is outlined in Figure 2 based on phased development over three stages:
• Stage 1 - Carbon Capture & Storage - development of a carbon capture and storage operation to provide CCS services to third parties and to support the subsequent production of blue hydrogen and clean gas-fired power;
• Stage 2 - Hydrogen Production – development of a blue hydrogen generation project utilizing the 8 Rivers clean hydrogen technology (8RH2) and clean power technology to produce ~43,000 tpa of blue hydrogen with near zero emissions; and
• Stage 3 - Renewables* and Green Hydrogen Project – integration into the Mid West Blue Hydrogen Project of approximately 220 MW of renewable power generation from both wind and solar to produce a further 18,000 tpa of green hydrogen.
*Subject to re-compliance conditions imposed by ASX
Upon completion of the 3-stage development, the Studies confirm (with feasibility-stage level confidence) that the Company will be able to produce approximately 61,000 tpa of clean hydrogen to produce approximately 350,000 tpa of clean ammonia to supply into Asian clean ammonia export markets.
Next Steps
Following the completion of the WA-31L CCS Feasibility Study, the Company expects that the WA-31L Joint Venture will progress the regulatory process with the National Offshore Petroleum Titles Administrator (NOPTA) seeking the required approval to have the Cliff Head Oil Field reservoir declared a Greenhouse Gas Storage Formation.
Pilot and Triangle Energy (Global) Limited have entered discussions with the objective of alignment on the future utilisation of the Cliff Head Facilities which would entail the Cliff Head Oil Field reservoir being declared an approved Greenhouse Gas Storage Formation. Subsequent to a declaration, the Company anticipates making an application to NOPTA for the grant of a Greenhouse Gas Injection Licence for the injection of approximately 500,000 tonnes per annum of CO2 into the Cliff Head Oil Field reservoir for permanent sequestration. Receipt of this injection licence would enable the Company to commence the implementation of the CCS Project with the project anticipated to be operational by 2025. We are pleased to advise that Pilot and Triangle are in constructive and cooperative discussions regarding this development.
In progressing this development path, the Company will be focused on the following activities over the next 12-months for the Stage 1 CCS Project:
• Permitting - Engaging with regulators to secure the necessary regulatory approvals;
• Site Acquisition - Completing project site selection and commencing site acquisition;
• Commercial Offtake - Engaging with prospective parties for commercial off-take;
• EPCM Contractor – Commence engagement with potential EPC contractors; and
• Pre-FEED - Commencing detailed preliminary Front-End Engineering & Design (preFEED) and detailed costings for the CCS and Clean Power and Hydrogen Projects
Completion of the development path over the next 12-months is aimed at securing all necessary regulatory approvals, securing commercial off-take arrangements and completing a full bankable feasibility study and FEED package to enable the Company to take a final investment decision (FID) for the Stage 1 Project.
Feasibility Study Results
Pilot has prepared summaries of the Feasibility Study results set out in the following Annexures to this announcement:
• Annexure A: Mid West CCS Resource Potential
• Annexure B: Mid West Renewable Energy Feasibility Study
• Annexure C: Mid West Hydrogen Potential
• Annexure D: 8 Rivers Blue Hydrogen and CO2 Technology Study
• Annexure E: Hydrogen & Ammonia market updates
The summaries are structured to provide an overview of the studies with information presented on a summary and aggregate basis, where necessary, to protect the intellectual property and commercially sensitive nature of certain aspects of the studies.
