Special Report: A syndicate of sophisticated investors is again injecting a significant sum of cash into Pilot Energy that will allow the company to get cracking on the development of the Mid West Clean Energy Project as soon as it gets the green light from Aussie regulators.
Pilot Energy (ASX:PGY) has secured six binding convertible note agreements with a syndicate of sophisticated investors led by Discovery Investments Pty Ltd, which is headed by energy industry veteran Greg Columbus, for a $3.5m investment.
Columbus, who has over three decades of experience in the energy and oil and gas sectors, is also the current non-executive chairman of Talon Energy (ASX:TPD) and past chairman of Warrego Energy (ASX:WGO), which was taken over by the Hancock Prospecting Group in March 2023.
Signalling a vote of confidence in Pilot and its Mid West Clean Energy Project in Western Australia, this is the second time this year that the group has invested a significant sum of cash.
In May, they stumped up $3m via a convertible note agreement.
Importantly, this fresh cash injection means Pilot can start front end engineering design (FEED) work for its carbon capture and storage project as soon as it receives approval from the National Offshore Petroleum Titles Administrator (NOPTA).
The cash will also cover pre-FEED preparatory work for the broader MWCEP and provide general working capital while Pilot concludes partnering arrangements for the project.
Pilot is only a matter of weeks away from becoming the first to secure approval for an offshore carbon capture and storage (CCS) project in Australian waters.
The ‘goalkeeper’ of the clean energy transition
Last week at the COP28 climate summit in Dubai, Australian Minister for Climate Change and Energy Chris Bowen described CCS as the “goalkeeper” of the clean energy transition and demonstrated his support for the abatement of emissions.
He was quoted as saying: “Abatement is a word that gets thrown around but we need to be clear, we want to reduce fossil fuel use and abatement is the backstop for those areas, like the goalkeeper which we need on the field. It is not an excuse or a delay, it is not a reason for inaction, it is a path of the overall solution, we have to make that very clear.”
The Western Australian government has also last week highlighted CCS as a key focus of its Sectoral Emission Reduction Strategy (SERS), which includes the proposed development of a carbon capture utilisation and storage action plan.
Since lodging its submission to NOPTA, Pilot has secured partnerships with Canada’s Svante Technologies – a Global Cleantech 100, Australian carbon technology developer KC8 Capture Technologies, Norway-based CO2 shipping company Knutsen NYK Carbon Carriers (KNCC) and US-based leading international full-service net-zero solutions provider 8 Rivers Capital.
The first stage of the Mid West Clean Energy 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.
Cliff Head represents one of the first offshore CCS projects in Australia. NOPTA approval would declare the area as an identified greenhouse gas storage formation.
The CCS project will have over 50 million tonnes of potential total storage capacity and will allow for continuous injection through 2050.
This will pave the way for 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.
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.
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