Pilot Energy receives $11.5m acquisition offer for Three Springs solar farm project

Oil and gas explorer Pilot Energy (ASX: PGY) has received an $11.5 million offer from clean energy solutions provider EDP Renewables APAC to acquire the Three Springs solar farm project in Western Australia.

The 376-megawatt farm is being developed to support the delivery of up to 1.2 million tonnes per annum of low-carbon ammonia from Pilot’s Mid West Clean Energy Project (MWCEP), commencing in 2028.

However, Pilot’s MWCEP project team has recently identified opportunities to source renewable generation closer to the proposed project site.

Carbon storage project

Proceeds from the sale of Three Springs are expected to provide the capital to progress Pilot’s Cliff Head carbon storage project in the offshore Perth Basin, which forms part of the overall MWCEP.

The project aims to provide over 1Mtpa of permanent carbon capture and storage from third-party industrial carbon dioxide emissions, as well as up to 99% of any emissions generated by the MWCEP.

It was originally a joint venture between Triangle Energy (Global) (ASX: TEG) – which held 78.75% equity – and Pilot (21.25%); however, Triangle announced in July it would divest its share to Pilot for $16m.

Strategic move

Pilot chair Brad Lingo said the sale of Three Springs would be a valuable and strategic move for the company.

“This proposed sale is a great result for our company and will provide significant capital for us to progress the Cliff Head project and finalise the acquisition of Triangle’s interest,” he said.

“It will also help accelerate the development of renewable power sources in the Mid West to power the MWCEP.”

EDP’s non-binding offer remains subject to the satisfaction of conditions precedent and is expected to be finalised before year-end.

MWCEP grant

In August, Pilot received the first instalment of a $6.5m federal government grant to progress carbon capture and advance planned activities for the MWCEP.

The $3m payment was made under the Carbon Capture Technologies program, which promotes emerging technologies such as direct air capture and mineral carbonisation to decarbonise hard-to-abate industrial processes and directly remove carbon dioxide from the atmosphere.

Pilot will use the funds to progress engineering and technology demonstration activities across three carbon capture facilities, with the initial potential to capture up to 300,000t of carbon per year—approximately 50% of the estimated total required to support the Cliff Head project.