Pilot Energy has locked in a sharp deal with United Arab Emirates-based Kala Data to launch modular data centres at its Arrowsmith production facility in Western Australia’s Perth Basin, aiming to tap quick cash flows to propel its ambitions for the project’s Cliff Head carbon storage transition.
With Cliff Head’s oil production winding down, 90 per cent of Arrowsmith’s 4.4-megawatt gas-fired power capacity sits idle and is ripe for repurposing.
Enter Kala Data and its power hungry compact modular data centre technology. Targeting a 1 MW unit by early next year, the company says it plans to scale to 4 MW by mid-2026 if the financials hold up.
The partnership says it is also eyeing a hefty 30-35MW expansion, potentially at Pilot’s Three Springs solar project, or another accompanying site at the future green energy hub.
Data centres are turning into global energy gluttons, already chewing through 2 per cent of the world’s electricity, to power cloud computing, crypto mining and AI workloads.
Forecasts peg their demand doubling by 2030, driven by AI’s relentless growth. In Western Australia, where coal shutdowns and renewable integration are beginning to squeeze the grid, data centres could redefine the energy landscape, demanding stable, low-carbon power to meet tech’s voracious needs.
Pilot is jumping into the trend with both feet, harnessing Arrowsmith’s surplus gas-fired generation and its seasoned Cliff Head operations to grab a foothold in a power-hungry data market.
The data centre will initially crank out high-performance computing, with flexibility to shift to AI-driven tasks as global demand evolves, positioning Pilot to ride the wave of WA’s tech-energy crossover.
Pilot’s existing 4.4MW gas-fired generators will power the data centre, with the company procuring gas supply for the project.
Kala says it is handling the tech and upfront costs, deploying and remotely controlling its proprietary modular system, leaving Pilot with a 50 per cent stake via the issue of 38 million new shares to Kala at 2 cents – well north of today’s 0.7c price - escrowed for a year post-commissioning.
Cash flows are expected to result from date centre revenues minus gas costs and hardware upgrade reserves, which are then split 50:50 between the partners.
Pilot estimates that its share of profits from a potential 30MW data centre operation could generate sufficient pre-tax cash flows to internally fund all of Cliff Head’s operating costs while it transitions the operations to a carbon storage project.
Pilot Energy managing director Brad Lingo said: “This partnership with Kala Data represents an innovative and commercially attractive use of Pilot’s Arrowsmith facilities. By leveraging surplus gas-fired power and the existing Cliff Head operations team, we aim to generate an early and material positive cash flow while laying the foundation for long- term growth in renewable energy and carbon storage.”
The partnership aligns with Pilot Energy’s strategy of squeezing value from existing assets, blending gas-fired power, solar developments and future carbon storage.
The new project is scalable too, with the potential to expand across multiple sites.
Kala Data is a cashed-up UAE tech outfit looking to branch out into the world of computing from its traditional, finance, geology and energy expertise.
Its focus on blending renewables with baseload power gels with Pilot’s clean energy vision, making the deal a natural partnership.
The company boasts Australia’s largest offshore oil and gas exploration permit, encompassing proven fairways along WA’s Mid West coast.
Whilst progressing its traditional oil and gas farmout ambitions, Pilot is steering the Cliff Head oil production facility into Australia’s first offshore CO2 storage project. As a part of its push into hydrogen and clean ammonia for APAC markets.
The company is navigating the final stages of acquiring Triangle Energy’s remaining stake in Cliff Head, boosting its control of the asset’s infrastructure, including pipelines and the Arrowsmith plant.
The data centre venture could be just the cash engine Pilot needs to bridge its transition to carbon storage while tapping into a booming global trend.
With WA’s energy market accelerating toward post coal status and data centres reshaping power demands, the Arrowsmith initiative might be the start of a much broader solution to come for the resources flush state.
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