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ASX: PGY - Pilot Energy

Pilot Energy: From depleted oil well to carbon storage – now that’s innovation!


Pilot Energy Executive Chairman Brad Lingo on 3AW, 2GB, 4BC & 6PR Bulls N' Bears Report


Listen to ASX-listed Pilot Energy Executive Chairman Brad Lingo talk to Matt Birney on the Bulls N’ Bears Report about Pilot’s remarkable plan to turn an old oil well into a big money making carbon storage “warehouse”.



TO LISTEN TO THE PILOT ENERGY AUDIO INTERVIEW - CLICK BELOW



Pilot Energy is an oil and gas producer at the Cliff Head project that it jointly owns with Triangle Energy near Geraldton. Curiously however Pilot is looking to buy out Triangle and then convert the operation into a carbon capture and storage project that makes use of the depleted underground oil wells for storing carbon. This week the project got a big shot in the arm after receiving a tick of sorts from the Federal Minister for Resources.


RADIO INTERVIEW - TRANSCRIPT


Matt Birney - Welcome to Bulls N' Bears brought to you today by Pilot Energy


Matt Birney - ASX code: PGY


Matt Birney - I'm Matt Birney and I'm joined now by the Executive Chairman of Pilot Energy, Brad Lingo.


Matt Birney - Hi Brad


Brad Lingo - Hi Matt, pleasure to be with you


Matt Birney - Okay so Pilot Energy is an oil producer at the Cliff Head project that it jointly owns with Triangle Energy near Geraldton. Curiously however Pilot is looking to buy out Triangle and then convert that operation into a carbon capture and storage project that  makes use of the depleted underground oil wells for storing carbon.


Matt Birney - This week the project got a big shot in the arm after receiving a tick of sorts from the Federal Minister for Resources.


Matt Birney - Okay Brad we'll get into that in just a moment but firstly, what's the plan here? How does an old oil well convert into a carbon storage site?


Brad Lingo - Well as we like to say the Cliff Head oil field was a warehouse for oil for millions of years and we're going to turn it into permanent vault for CO2.


Brad Lingo - The Cliff Head field is actually ideal for it because as we produced oil, we produce water along with it and throughout the entire life of the production since 2006 we've been reinjecting water into that warehouse so as we go forward, instead of pumping water back down into the warehouse, we're going to start loading that warehouse up with CO2, and CO2 when it's compressed up to its super critical phase is about 65 per cent the density of water so it remains a gas but it acts like a barrel of water.


Matt Birney - Okay where will you get the carbon from and how do you plan to make money out of this?


Brad Lingo - So in the first instance, there's one, there's Dongara cement plant just north of us about 10 km away, that emits about 130,000 tonnes of CO2 per annum.


Brad Lingo - They're the big new gas processing plants being built at Waitsia, Lockyer Deep and at Erregulla gas field discoveries that are all located within about 15 to 20 kms of our onshore facility. All of those are going to be stripping CO2 out of that raw gas as they produce that out of the ground and their current plans are to vent it.


Brad Lingo - When you put all that CO2 together with Dongara cement you're getting upwards of about 3/4 of a million tonnes of CO2 per annum and we can capture that CO2 transport it to Arrowsmith and Cliff Head and store it really quite affordably.


Matt Birney - Ok


Brad Lingo - The way we make money out of it? As we store it that actually creates an Australian Carbon Credit Unit and the projected price for those credits starting in 2026 is about $55 to $65 a tonne. The government current fallback price, that Cost Containment price, is $75 a tonne and our cost of storage is only about $15 a tonne so there's a good profit margin in it.


Matt Birney - Yeah so the Federal Minister for Resources just made, quote, a declaration of greenhouse gas storage formation at this project. What exactly does that mean?


Brad Lingo - Well that's effectively the Federal Government giving us the technical good housekeeping seal of approval. That we've been able to say we found a reservoir, Cliff Head oil reservoirs, that are suitable for one, the injection and permanent storage of CO2.


Brad Lingo - It is a full technical validation that those reservoirs can act as both a place to safely inject CO2 and safely and permanently store it.


Matt Birney - Brad Lingo from Pilot Energy


Matt Birney - Thanks for joining me on Bulls N' Bears and remember we're only here to give you information, not advice, which you should of course seek independently.


Matt Birney - I'm Matt Birney and this is Bulls N' Bears


Outro - For more public company interviews go to the money page on the 6PR, 2GB, 3AW and 4BC websites and click the public companies tab.


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