Pilot Energy Chairman calls Korea 'perfect' green partner

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Pilot Energy Chairman calls Korea 'perfect' green partner

Published: 04 Jun. 2024, 06:00 Updated: 04 Jun. 2024, 11:34

SARAH CHEA
chea.sarah@joongang.co.kr

Brad Lingo, chairman of Australia's Pilot Energy, speaks during a recent interview with the Korea JoongAng Daily in central Seoul on May 20. [PARK SANG-MOON]

[INTERVIEW]

Korea is a priority for Pilot Energy's massive clean energy initiative, according to Brad Lingo, chairman of the Sydney-based company.

Up to 70 percent of ammonia production from the Western Australia-based Mid West Clean Energy Project (MWCEP) will be delivered to Korean companies as Korean firms, especially power generators, strive to find new sources of clean energy.

"Pilot Energy has been in talks with multiple Korean companies, including Samsung and Korea Electric Power Corporation [Kepco] for like two years,” Lingo said during a recent interview with the Korea JoongAng Daily in central Seoul, adding that “it's been quite progressive."

“It’s fair to say that Korean companies will own at least 60 to 70 percent of the project.”

Lingo recently led a delegation from Korea, consisting of around 40 representatives of government and private entities, on a four-day trip to Western Australia to showcase the project's progress and tour its sites.

Brad Lingo, chairman of Australia's Pilot Energy, speaks during a recent interview with the Korea JoongAng Daily in central Seoul on May 20. [PARK SANG-MOON]

The MWCEP project, initiated in 2022, aims to utilize its current oil and gas assets, as well as existing infrastructure, to develop facilities for low-cost carbon capture and storage (CCS) and clean ammonia.

The depleted Cliff Head offshore oil field will be transformed into a permanent CCS capable of storing more than 1 million tons per year starting in 2026. The CCS project will have a potential total storage capacity exceeding 50 million tons, ranking it among the top 10 CCS projects globally.

The ASX-listed company then aims to produce 1.2 million tons of clean ammonia in 2028, which will eventually increase to 2 million tons by 2030 and up to 3 million tons by 2032.

“CCS is the key enabler to delivering the lowest cost of clean hydrogen and ammonia, which has no carbon in it,” Lingo said. “Our project is the only blue ammonia plant in the world that has fully integrated carbon capture that enables us to produce very low-cost clean ammonia, and it enables us to also produce it at a very low carbon intensity.”

Samsung C&T is participating in the project with a deal enabling it to purchase a 20 percent stake upon the start of production and expand that share as time goes on.

“One of the things that's core to our project is also that we're utilizing a new form of hydrogen production technology by 8 Rivers,” Lingo said.

North Carolina-based 8 Rivers is a subsidiary of SK Materials, which invested a total of $400 million to acquire the management rights.

“If you use ammonia in place of coal for every percentage of ammonia that you use in a coal-fired power plant, you reduce carbon emissions by that same percentage,” Lingo said. “So using 20 percent ammonia means that you can eliminate 20 percent of your carbon emissions.”

Low costs are also one of Pilot Energy's most appealing factors, Lingo added.

It costs Pilot less than 400 Australian dollars ($266) to produce one ton of ammonia, based on our feasibility studies from 2022, where the production of the conventional gray ammonia common in today's market can range from $800 to $1,000 per ton.

“During the pandemic, ammonia prices went over $1,300 per ton, while our cost of production was less than $300, which is a quarter of the market high,” Lingo explained. “Low-cost, low-carbon intensity clean ammonia production is made possible through integrated CSS.”

Lingo noted that BloombergNEF selected Pilot as one of the three lowest-cost producers in the world in an analysis of 28 countries.

“There's a perfect partnership opportunity between Korea and Australia; Korea wants to diversify their sources of supply to be clean, carbon-free sources of energy but also someone that can also provide the ability to eliminate and help them manage their carbon emissions,” Lingo said.

“We can supply carbon-free energy molecules to Korea, but, equally, we can also help Korea manage the rest of those emissions by providing a place where carbon that's captured in Korea can be permanently stored, which would be in Australia.”

Korea needs 16 million tons of ammonia by 2036 under its carbon neutrality roadmap, which represents around a 1,131 percent increase from 2020 levels. The country secured only 1.22 million tons of ammonia in 2020 while global trade volume reached 18 million tons, according to data from Kepco.

“Pilot would really like to see if we could help the Korean government to meet its carbon neutrality goal, and we'd love to engage with the Korean government and be identified as a top priority.”

Pilot Energy is set to open an office in Korea at the beginning of next year, Lingo added.

BY SARAH CHEA [chea.sarah@joongang.co.kr]