Pilot Energy receives crucial government nod and investor backing for CO2 storage project

Pilot Energy (ASX: PGY) has received $4 million in firm commitments to support its Mid West Clean Energy project (MWCEP) in Western Australia.

Just days after the company reached a critically important milestone for the MWCEP and the Cliff Head carbon storage project north of Perth, Pilot received strong market support for its carbon capture and storage (CCS) plans from sophisticated, institutional and professional investors.

Government approval

Pilot received one of the first Australian government approvals of its kind late last week, with federal resources minister Madeleine King making an offshore carbon storage “declaration” for the MWCEP.

The declaration covers the WA 31-L licence area, noting a storage capacity of 13.4 million tonnes for the Cliff Head storage formation—sufficient for the initial stage of the MWCEP Cliff Head CO2 storage project.

“This declaration represents a significant advancement in the development of Pilot’s MWCEP and is an exciting milestone for CCS and clean energy production in Australia,” executive chair Brad Lingo said.

“As the Pilot team worked through this application, it was with the singular goal of delivering a project that can enable WA emitters to take action with a clear opportunity to reduce carbon emissions through abatement and permanent storage on a cost-effective basis.”

De-risking milestone

Mr Lingo stated that the declaration was a key de-risking milestone for the project, as it is the crucial condition required for many of the MWCEP commercial agreements including a WA 31-L acquisition deed between Pilot and Triangle Energy.

Along with engineer Genesis, Pilot now expects to quickly finalise the pre-front end engineering design (FEED) work stream on the MWCEP.

Under the declaration, Pilot is able to proceed with the next phase of the MWCEP development including traditional owner and stakeholder engagement, CO2 storage project FEED, and final selection of hydrogen and ammonia technology partners that will enable ammonia FEED to commence in the second half of the year.

The MWCEP team is also undertaking further engagement with regulators to progress the remaining project approvals, including an injection licence and federal and state environmental approvals.