1414 Degrees (ASX: 14D) is pleased to announce it has signed agreements with Woodside Energy Technologies Pty Ltd (Woodside), a subsidiary of Woodside Energy Ltd, to support further development and potential partnership in the future commercialisation of 14D’s SiBox™ technology.
1414 Degrees have been working with Woodside to establish a suitable validation project that will assess the commercial potential of 14D’s thermal energy storage technology, SiBox. An agreement has been executed for Woodside to contribute up to $2m to the circa 1 MWh SiBox demonstration module. Contributions by Woodside will be made on the completion of specific project milestones by 14D.
The validation project was previously announced to the market in May this year. It is now scheduled to be commissioned in early 2023 upon which a series of operational tests will be performed into 2024. Following review of results in the testing program, Woodside will then have the opportunity to notify 14D if they wish to proceed to jointly develop and commercialise the SiBox technology. In this instance a special purpose vehicle (SiBox SPV) will be created to which the SiBox™ Intellectual Property (IP) will be transferred for future development and commercialisation. Woodside’s ownership of the SPV will be in proportion to its investment and the assessed fair value of the SPV after the completion of the validation project. 14D will have an ownership interest in the SPV of not less than 51%.
The precise commercial arrangements for the SiBox SPV will be the subject of negotiation between the parties as the validation project continues. If Woodside decide against jointly participating in the direct ownership of the SiBox technology or the parties cannot conclude definitive agreements concerning the SiBox SPV within an agreed negotiation period, 14D will supply a quantity of commercial product to Woodside on favourable terms if requested. In addition, Woodside will have a right of first refusal (ROFR) for a period to undertake further investment in the development and commercialisation of SiBox, and to acquire the SiBox IP.
If the SiBox SPV is not established and relevant IP transferred within a specified period following Woodside’s notice to proceed, or supply of commercial products to Woodside has not otherwise commenced by 30 June 2025, Woodside will have the right to directly develop and use the SiBox IP in its own projects. If the development agreement is terminated as a result of 14D’s material breach, or if 14D suffers an insolvency event, the licence granted to Woodside will expand to allow it to develop, use and commercialise the SiBox IP for any purpose.
The validation project is an important step towards advancing the Technology Readiness Level (TRL) of the SiBox technology. It will aid in demonstrating and de-risking the technology for potential future integration into Woodside’s operations, and provide confidence to other large scale industrial and utility customers. This will accelerate the potential commercialisation of the technology as a robust and flexible solution to replace heat generated by fossil fuels with heat from renewable sources.
Matt Squire, Chief Executive Officer of 14D said, “Woodside is Australia’s leading natural gas producer and we are delighted they have chosen to participate in the funding of the construction and testing of our SiBox demonstration module. 1414 Degrees is committed to demonstrating how our SiBox technology can contribute to the global energy transition. We believe that our technology has the potential to be a major component of future renewable energy projects due to its flexibility and capability in delivering high temperature heat. Having a partner with the technical and financial capability of Woodside will only accelerate the potential commercialisation of SiBox as a competitive clean energy storage solution. We very much look forward to working with Woodside as the world continues to transition towards a cleaner energy future”.
Further updates of 1414 Degrees’ strategy will be provided to shareholders prior to the Annual General Meeting in November.