Pilot Energy and Kala Data Ignite WA’s First Modular Data Centre at Arrowsmith

Strategic Partnership Unlocks New Revenue Stream

Pilot Energy Limited (ASX, PGY) has announced a strategic alliance with UAE-based Kala Data to develop a modular data centre at its Arrowsmith Production Facility in Western Australia. This initiative leverages Pilot’s underutilised gas-fired power generation capacity, a byproduct of the transition of the Cliff Head oil field towards carbon storage.

The partnership represents a savvy pivot for Pilot, transforming surplus energy assets into a cutting-edge technology hub. Kala Data will deploy its proprietary modular data centre system, initially installing a 1 MW unit in early 2026. If successful, the facility will expand to 4 MW within six months, with ambitions to scale up to 30-35 MW across Arrowsmith or Pilot’s Three Springs Solar project.

Innovative Use of Existing Infrastructure

What makes this venture particularly compelling is the integration of existing gas-fired generators, which currently operate at only 10% capacity due to the oil field’s carbon storage transition. By powering the data centre with this surplus energy, Pilot can generate near-term positive cash flow without significant new energy infrastructure investment.

Kala Data will fund the initial capital expenditure, while Pilot will issue approximately 38 million new shares at 2 cents each to Kala upon successful commissioning. This share issuance is escrowed for one year, aligning interests and mitigating immediate dilution concerns for existing shareholders.

Positioning for Future Growth and Sustainability

The data centre will initially support high-performance computing workloads, with flexibility to adapt to AI-driven demands as the market evolves. This aligns with broader trends where energy producers diversify into technology-driven revenue streams, marrying traditional energy assets with digital infrastructure.

Managing Director Brad Lingo highlighted the project’s role in underpinning Pilot’s longer-term vision, "This partnership lays the foundation for growth in renewable energy and carbon storage, while generating early, material cash flow." The integration of gas-fired power, solar developments, and carbon storage initiatives positions Pilot as a pioneer in Western Australia’s emerging green data centre landscape.

Looking ahead, the success of the initial phases will be critical to unlocking the full potential of a 30 MW data centre, which Pilot estimates could generate sufficient pre-tax cash flow to fund the Cliff Head carbon storage transition internally.