A consortium of South Korean mega-energy firms led by Korea Southern Power Co is set to enter into an agreement with Pilot Energy to jointly develop the Mid West clean energy project in the Perth Basin to secure a supply of ammonia.
The ammonia will be used for hydrogen co-firing in coal-fired power plants in Korea.
The Korean Southern Power Co is one of six State-owned power companies and the largest electric utility group in the Asian country. It plans to burn a mix of 20 per cent ammonia and 80 per cent coal at the company’s large Samcheok 2044 megawatt thermal power plant in the eastern Korean province of Gangwon-Do, about 120 kilometres from the capital city of Seoul.
The consortium received 2 billion Korean won (A$2.2 million) in funding last November from the Korea Export-Import Bank to conduct a feasibility study on the project.
The two parties have signed a non-binding project framework agreement to jointly develop the project, with Pilot to test the market by providing a front-end engineering design (FEED) request to leading energy contractors.
The FEED request will entail contractors providing autothermal reforming or small modular reactor solutions for blue hydrogen production.
Any potential solutions would be expected to balance cost and carbon intensity. Responses to the FEED request will be required by March 15.
The Korean consortium will engage an engineering advisor to conduct an independent technical study on the intriguing project, with costs covered by the Korean Export-Import Bank grant. The study will recommend both the preferred technology and FEED contractor to move the project forward.
The agreement stipulates both parties will make their best endeavours to fund FEED, confirm ownership stakes in the clean energy project, determine ammonia offtake participation and set out terms for a final investment decision.
They are also expected to push for execution of the agreement by June 30 and aim for FEED commencement by August 1, subject to an agreement execution.
The consortium comprises Korea Southern Power Co, Korea East-West Power, Samsung C&T and hydrogen producer Approtium.
Pilot has a fascinating project next to where the Mid West clean energy project is planned to be built. The company recently bought the Cliff Head oil well from former major partner Triangle Energy.
The company plans to repurpose the depleted oil well into a carbon storage facility capable of storing liquified carbon emissions from WA’s industrial emitters. Pilot will create a carbon storage business charging third-party emitters, adding to its arsenal with the clean energy ammonia project.
Pilot has plans to become Australia’s first blue ammonia producer and says it can overcome the major issue with developing an ammonia plant - dealing with its emissions.
Ammonia is typically created by splitting natural gas into hydrogen and then carbon dioxide.
Carbon dioxide creates a pollution dilemma for firms looking to enter the lucrative ammonia industry.
Pilot says it has the answer right on its doorstep with its own carbon storage facility, which could capture 99 per cent of the carbon dioxide emitted from the plant.
Pilot is also planning to supply blue and eventually green hydrogen to Western Australia’s energy grid, positioning itself as a major supplier as the State looks to cut emissions and help develop sources of cleaner energy. The WA government already has a liking for hydrogen having appointed the State’s first hydrogen minister in 2021.
The company is intent on targeting the sizeable South Korean market for hydrogen-ammonia and with the country’s largest energy players keen to get on board, Pilot could find itself steering a profitable play.
Is your ASX-listed company doing something interesting? Contact: matt.birney@businessnews.com.au
By Craig Nolan
