Key Highlights:
- Non-binding, conditional MOU signed between Pilot Energy and Samsung C&T Corporation Engineering & Construction Group for the development of the Cliff Head CCS Project and the Clean Energy Ammonia Project, together known as the Mid West Clean Energy Project (MWCEP).
- Joint progression and funding of the MWCEP by both parties, based on their respective participating interests.
- Samsung C&T to acquire a 20% participation interest in the MWCEP, subject to fulfillment of key conditions, with rights to serve as the EPC contractor for the Clean Ammonia Project.
- A commitment from Samsung C&T to endeavor to arrange for the off-take of clean ammonia, facilitating export to Korea.
- Consideration of circa $67 million to be paid to Pilot by CHCCS Co, a newly formed joint venture entity, at financial close, subject to a minimum forecast IRR for the CH CCS Project.
- Completion of the MOU is contingent upon NOPTA declaring a Greenhouse Gas Storage Formation over the WA-31-P area, the completion of the integrated project pre-FEED study, and final board approval from both parties.
In an exciting development for the clean energy sector, Pilot Energy and Samsung C&T Corporation Engineering & Construction Group (Samsung C&T) have announced a strategic partnership through a non-binding, conditional Memorandum of Understanding (MOU). This agreement sets the stage for the collaborative development of the Cliff Head Carbon Capture and Storage (CH CCS) Project and the Clean Energy Ammonia Project, which together form the Mid West Clean Energy Project (MWCEP).
Under the terms of the MOU, both Pilot and Samsung C&T have committed to jointly progressing and funding the MWCEP, contributing in proportion to their respective participating interests. Upon satisfying the key conditions outlined in the MOU, Samsung C&T will acquire a 20% participation interest in the MWCEP. Furthermore, Samsung C&T will serve as the Engineering, Procurement, and Construction (EPC) contractor for the Clean Ammonia Project and is tasked with the responsibility of arranging for the off-take of clean ammonia, ensuring its export to Korea.
Pilot Energy stands to receive a consideration of approximately $67 million from CHCCS Co, a newly established joint venture project entity. This payment, due at financial close, is based on the historical construction costs of the Cliff Head oil project, which serves as the foundational asset for the MWCEP. The realization of this transaction is subject to achieving a minimum forecast Internal Rate of Return (IRR) for the CH CCS Project, a figure to be agreed upon by both parties.
The consummation of the MOU hinges on several critical conditions:
- The declaration of a Greenhouse Gas Storage Formation over the WA-31-P area by the National Offshore Petroleum Titles Administrator (NOPTA).
- The successful completion of the integrated project pre-FEED study.
- The receipt of final board approval from both Pilot and Samsung C&T.
Samsung C&T Corporation, a Korean multinational powerhouse, brings vast experience in engineering, procurement, and construction across various sectors. With a deep commitment to renewable energy projects, Samsung C&T is strategically positioned to contribute significantly to the success of the MWCEP.
This partnership reflects a shared vision between Pilot Energy and Samsung C&T Corporation Engineering & Construction Group, highlighting their dedication to advancing sustainable energy solutions and leading the global transition toward a cleaner, more sustainable future.
Brad Lingo, Chairman of Pilot noted that “Pilot is delighted that Samsung C&T has partnered with us in the development of the Mid West Clean Energy Project. Samsung C&T’s participation is an important step as they provide additional technical expertise and financial strength to ensure the successful development of this exciting Western Australian clean energy project. Furthermore, it continues the strong partnership and ongoing trading relations between Australia and Korea.”
Ross Gregory, Chairman of Australian Chamber of Commerce in Korea, commented that “this partnership is an exciting opportunity for both Samsung C&T and Pilot to jointly progress the Mid West Clean Energy Project development in Western Australia, further demonstrating the continued strong collaboration between Australia and Korea on important clean energy transition projects”.
About us:
Pilot is a junior oil and gas exploration and production company that is pursuing the diversification and transition to the development of carbon management projects, production of hydrogen and clean ammonia for export to emerging APAC Clean Energy markets. Pilot intends to leverage its existing oil and gas operations and infrastructure to cornerstone these developments. Pilot is proposing to develop Australia's first offshore CCS Project through the conversion of the Cliff Head Oil field and associated infrastructure from oil production to CCS as part of the Mid West Clean Energy Project.
Contact details:
Jane Morgan
jm@janemorganmanagement.com.au
