The four stages will comprise a development Phase 1 next year, followed by a Phase-1a in 2026 that will see the start of revenue generation through water sales, low carbon chemicals and high purity carbon dioxide sales.
Phase-2 is expected to get underway in 2028-2029 and contemplates full-scale expansion of the facilities to manage about 2 gigalitres of water produced during carbon storage operations, while targeting up to 80,000 tonnes per annum (t/a) of DAC atmospheric carbon removal.
From 2030 onwards, the joint development agreement envisages further expanded DAC extraction, looking at about 350,000t/pa atmospheric carbon removal, with further up-scaling potential.
Pilot says most of its first year’s expenditure for Project Wallaby will be drawn from an initial $3m grant funding, which Pilot received in August 2024.
During the first year of grant funding, Pilot will also complete feasibility studies on the potential carbon supply chain with big carbon emitters in WA.
The studies will examine likely supply lines, necessary infrastructure and transport routes linking the various sources of emissions through to delivery at the new facility to be established at Cliff Head.
Pilot’s chairman Brad Lingo said: “The Joint Development Agreement marks an important step in our progress at the MWCEP enabling our pilot project with Capture6. The world-leading technology Capture6 can bring to the MWCEP can materially reduce the cost and environmental impact of the MWCEP’s water handling system. It has also demonstrated the potential to generate revenue from the future sale of carbon removal credits and by-products, which may include hydrogen.”
The 6-square kilometre Cliff Head oil field and its Cliff Head Alpha platform lies about 10km offshore and about 270km north of Perth in a water depth of 15-20m.
According to Pilot, it was the first commercial oil discovery developed in the offshore Perth Basin and produced its first oil in May 2006.
Two 14km long pipelines leave the platform, traverse the seabed and run beneath the coastal dune systems and then connect with Pilot’s onshore Arrowsmith Stabilisation Plant, where crude oil and water are separated at the plant in the Arrowsmith industrial complex.
The Cliff Head platform and processing facilities are the only offshore and operating onshore infrastructure in the Perth Basin area and represent important infrastructure for any future nearby development.
Until recently, Pilot operated the Cliff Head oil well in joint venture with Triangle Energy. With the well now exhausted, Pilot is in the process of a $16m buyout of Triangle to acquire full control over Cliff Head, with the novel objective of repurposing the old oil well.
Under normal operations with a producing well, the separated “produced water” would be pumped back to the offshore platform where it is reinjected into the reservoir by three injection wells to provide reservoir pressure support.
Pilot plans to exploit the geological formations surrounding the well as a carbon storage facility capable of taking liquified carbon emissions from WA’s big industrial emitters via the lines currently used to return produced water to the well.
Interestingly, the end goal for Pilot is not just to create a business sequestering carbon from other emitters but for a longer-term plan to develop a “blue” hydrogen followed by an ammonia production business. That business would potentially use natural gas from Pilot’s own discoveries or – if necessary - from the Dampier to Bunbury natural gas pipeline which passes within about 15km of Arrowsmith.
While Pilot’s planned new industrial processes would also generate their own carbon emissions, the company has its obvious solution for them and would simply sequester them in the same offshore formations.
The combined liquified emissions from all contributors, including Pilot’s planned new projects operations, would be pumped back into the well and would gradually supplant the water currently used to maintain the internal well pressure.
Pilot says its project could be the world’s only blue hydrogen-ammonia plant that has fully-integrated carbon capture, which would provide low-cost clean ammonia.
Early this year the Australian federal government declared a “Greenhouse Gas Storage Formation” over the Cliff Head oil field.
Pilot also acquired a large Greenhouse Gas Assessment Licence earlier this year that means its potential storage acreage has ballooned from 72 sq km to about 7472 sq km.
Such an area represents an effectively infinite carbon storage capacity and with it, a business opportunity that could last for generations.
Capture6 describes its direct air capture technology as a game-changing which lies at the nexus between carbon removal and water security, removing carbon dioxide from the atmosphere while producing additional freshwater for local communities.
It comprises a set of engineering techniques that mimic what trees and plants do in nature – remove carbon dioxide from the atmosphere - and its process can be tailored for flexibility while maximising carbon dioxide removal through multiple capture pathways.
Capture6 says the company’s processes yield clean water for further use rather than consuming already scarce pure water supplies.
Its approach also allows for the amount of carbon dioxide removed to be easily measured and verified and that both the amount of chemicals used for capture and the weight of output can be calculated and verified.
Australia’s recent increase in climate targets underscores the country’s imperative to accelerate its clean energy transition.
Combined with the growing groundwater scarcity in WA, State and local governments and proponents of major projects are recognising the urgent need to implement sustainable water management practices.
If Pilot can meet both of its decarbonation and water security objectives in a single operation through repurposing of existing facilities and exploiting a vast geological carbon repository on WA’s doorstep, it will potentially have a winning trifecta.
Is your ASX-listed company doing something interesting? Contact: matt.birney@bullsnbears.com.au