8 Rivers Capital executes MOU with pilot for a $1m investment in support of mid west clean energy project and an ammonia offtake option – blue hydrogen.
Pilot Energy Limited (ASX: PGY) (Pilot or the Company) announce it has concluded a Memorandum of Understanding (MOU) with 8 Rivers Capital, LLC (8 Rivers) for 8 Rivers to invest in the Mid West Clean Energy Project (Project).
The MOU contemplates that 8 Rivers’ support will take the form of an investment of A$1 million (split equally in cash and in-kind) for Project costs (the Investment) and 8 Rivers will receive an option on offtake of ammonia once the Project is in production.
8 Rivers serves as Pilot’s technical adviser on its clean hydrogen project. Over the past 12 months, Pilot, together with 8 Rivers, has assessed the feasibility of deploying the 8 Rivers’ clean hydrogen technology (refer ASX 28 March 2022) and have concluded an MOU to extend the relationship into the development and execution of the Project.
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Implementation of the MOU (upon execution of definitive agreements) will align the parties for proceeding to development of this ground-breaking Western Australian Carbon Capture and Storage (CCS), clean hydrogen and ammonia production project.
The 8 Rivers Investment would focus on progressing engineering and commercialisation for the Project’s Stage 2 Blue Hydrogen and Stage 3 Clean Ammonia production (as defined in Figure 1.), structured as:
- A$1.0 million in a combined cash and in-kind contribution involving the deployment of 8 Rivers internal technical team to prepare design basis and engineering documentation required for the Stage 2 and 3 pre-FEED and FEED for deployment of the near-zero emissions 8RH2 hydrogen production process.; and
- 8 Rivers (or an affiliate/joint venture) being granted a priority right to enter into a longterm ammonia offtake agreement for an initial tranche of up to 172,500 tonnes per annum of zero-carbon ammonia production from the Project on market terms and conditions at the relevant time.
8 Rivers’ further Investment in Pilot, through this arrangement would be in addition to the 13.3 million options that were previously issued to 8 Rivers as part consideration paid for the feasibility study.
Subject to further due diligence and declaration of the Greenhouse Gas Storage Resource at Cliff Head (Stage 1 – CCS), the parties also plan to negotiate the terms for further participation by 8 Rivers and/or its affiliates in Stages 2 and 3 of the Project.
The work effort associated with the investment contemplated by the MOU is expected to commence over the next month and be completed by calendar Q1 2023. The work effort will be done in parallel to securing the regulatory approval of the Cliff Head CCS project (Stage 1).
Brad Lingo, Pilot Chairman, commented:
The Pilot team are looking forward to continuing our strong working relationship with 8 Rivers.
“Pilot’s feasibility studies demonstrated the benefit of combining the Cliff Head CCS resources with the 8 Rivers clean hydrogen solution at our Mid West Clean Energy Project. Given 8 Rivers market-leading expertise in zero carbon solutions, the investment contemplated by the MOU represents a strong endorsement of Pilot’s Mid West Clean Energy Project”.
Cam Hosie, 8 Rivers CEO said:
As a company, we are committed to enabling the development of zero carbon fuels globally.
“As the world continues to grapple with the consequences of climate change, we’re proud that Pilot is looking to 8 Rivers’ zero-carbon solutions to underpin the creation of one of Australia’s most significant offshore carbon capture projects located on a critical supply route for Asia.”
8 Rivers is a full-service Net-Zero solutions provider, having developed market-leading zero-carbon 8RH2 blue hydrogen technology, alongside the Allam Fetvedt Cycle (AFC) near-zero emissions power generation technology and other vital energy transition technologies from direct air capture to zero carbon steel.
From innovation to commercialization to deployment, 8 Rivers enables the world’s largest companies with the hardest decarbonization challenges to meet their net-zero goals.
8 Rivers recently announced a USD$100 million investment from SK Group, along with the establishment of an 8 Rivers-SK Group joint venture to focus on decarbonization of Korean and key Asian markets.
8 Rivers is the premier Net Zero solutions company globally for industrial decarbonization, offering innovative solutions that are deployment-ready today and will help drive global decarbonization through 2050.
Highlights of MOU:
• 8 Rivers Capital to invest A$1 million to support the development of the Mid West Clean
Energy Project;
• Investment to be used to accelerate deployment of 8 Rivers clean 8RH2 blue hydrogen
process and clean ammonia production; and
• 8 Rivers to secure offtake option for 172,500 tpa of clean ammonia-for-export
8 RIVERS CAPITAL EXECUTES MEMORANDUM OF UNDERSTANDING WITH PILOT FOR A$1 MILLION INVESTMENT IN SUPPORT OF MID WEST CLEAN ENERGY PROJECT AND AN
AMMONIA OFFTAKE OPTION, June 30, 2022
