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Assets & Strategy: Cool Energy
Nido Petroleum has a strategic investment in Cool Energy Ltd (Cool Energy), a Western Australian based company which is using innovative technology to remove contaminants, particularly CO2, from gas feedstocks.
Cool Energy is using its CryoCell® cryogenic gas processing technology to provide world-class gas processing solutions with a number of advantages to the global energy sector, including environmental, capital and operating cost benefits.
There is a significant market opportunity for new technologies in this area with a competitive advantage. World energy consumption is increasing by 3% each year, while oil production is reaching its peak. However, the natural gas industry is growing and natural gas is becoming the replacement fuel of choice.
Cool energy has a number of advantages over conventional technology. Cryogenic gas processing replaces chemical and physical solvent processes, meaning no chemical consumption which results in lower costs and no chemical hazards. The operating plant required is smaller and uses fewer equipment components which results in lower capital costs and less operating complexity. The CO2 can also be captured as a liquid, reducing the cost for geo-sequestration.
It will allow users of this technology to unlock gas reserves that were previously considered uneconomic due to their high levels of contaminants and allow for efficient separation of CO2, providing effective disposal of greenhouse gases.
Nido is one of 11 investors in this new technology, along with partners such as ARC Energy, Shell, Woodside Petroleum and Curtin University. Nido’s initial investment comprised a 36% interest in Cool Energy and a series of redeemable convertible share for a total consideration of A$1.595 million in 2005. In December 2005 Shell Global Solutions International became a significant shareholder and Nido’s interest was reduced. Nido’s current interest stands at 25.7%.
During 2005 and the first half of 2006, Cool Energy designed and constructed a two million cubic feet per day pilot plant which is being used to test the Cool Energy process. This plant is located at ARC Energy’s Xyris gas field in the Perth Basin, 360 kilometres north of Perth.
In July 2006, field trials of the CO2 stripping technology commenced at the pilot plant. The plant testing is currently 90% complete and is expected to be finished in July 2007. The field trial is designed to verify the CO2 separation capability of the CryoCell® technology by achieving the laboratory results under field operating conditions. The results are currently being analysed to confirm if the technology can be used on a commercial scale.
Cool Energy are also undertaking a pre-feasibility study as well as identifying the first commercial project and educating clients on the cost and process advantages of this technology.
The Cool Energy board comprises a number of industry experts who will lead the technology to commercial success.
Mr William Bloking has recently been appointed as Chairman of the Board. Mr Bloking is newly retired form his position as President of Australia/Asia Gas at BHP Billiton Petroleum, where he had overall strategic, commercial and corporate accountability for BHP Billiton’s international LNG business and its domestic gas business in Australia.
Managing Director Jessie Inman has 20 years experience in international marketing and business development. Ms Inman is well known for her conceptual knowledge and ability to build companies and markets through her expertise in strategic and systematic management.
Nido’s Managing Director Mr David Whitby is one of three non-executive directors at Cool Energy, the others being Shell’s Mr Rob Mayfield and Ms Claire Poll from Inmarsat.
For more information see the Cool Energy Website.