Geothermal Joint Venture Forms in Australia

A new geothermal energy joint venture (JV) between Petratherm Limited and Beach Petroleum Limited (BPT) will enable the development of Petratherm’s Paralana geothermal energy project.

This could enable Paralana, Australia’s first large-scale commercial geothermal plant, to be producing electricity by the end of 2009, with potential to expand to base load supply. Paralana is currently 100%-owned by Petratherm and has — in its first two development stages — already achieved one of the country’s highest “hot rock” temperature indicators. Stage 3 will involve two new wells close to the Paralana test well, thermal resource definition, circulation tests and the establishment of an underground heat exchanger. Initial costs for Paralana Energy JV Stage 3 are around A$20 million [US$15.4 million]. Under the terms, Beach will earn a 21% interest in the project by contributing $5 million to the drilling and the stimulation of the first of the planned two new wells; contributing a further $5 million to the cost of drilling and stimulating the second wells; and — subject to the success of the heat exchanger stage — Beach can earn a further 15% for a total project interest of 36%, by contributing a further $20 million. This would contribute to the cost of installing the initial surface-based electricity generation plant of 7.5 megawatts capacity at Paralana. “The agreement focuses significant new financial and technical expertise on Paralana as well as an external rating of the commercial potential in this country for geothermal energy and its providers,” said Terry Kallis, Petratherm’s Managing Director.