Polaris Geothermal Gears Up Its Power Production

Polaris Geothermal is adopting a more aggressive development strategy for its San Jacinto Tizate (SJT) geothermal project in Nicaragua, based on recommendations prepared by independent geoscientific consultants.

The Feasibility Study Amendment was commissioned following an evaluation of the SJT resource, which increased the resource’s potential productive capacity from 75 MW (90 percent probability) to 200 MW (90 percent probability). The modified strategy will use a series of 10.7 MW Modular Condensing Turbine (MCT) units to accelerate development and will result in long-term stabilization of tariffs in Nicaragua. Under the original development plan, Phase I involved the development of 20 MW using a combination of two backpressure units and a binary cycle plant. Using the MCTs, Polaris production will increase to 31.4 MW at the end of Phase I. Further expansion to approximately 80 MW will be undertaken in parallel to complete Phase II. This second phase is required to satisfy the company’s 66 MW 20-year take or pay Power Purchase Agreement with the local subsidiary of the Spanish distributor. Any power production in excess of the 66 MW can be sold in the open market. The company’s long-term objectives will be to increase production to reach the full potential of the field, forecast to be 200 MW or greater. The preliminary capital cost estimate to complete Phase I development using the MCTs is approximately US$78 million. The Phase I estimate includes US$24 million expenditure for the 10 MW Stage 1 of Phase I, completed in June 2005. Estimated Phase II capital costs are approximately US$105 million. Included in Phase II is an extensive drilling program to further develop the SJT resource. Consultants concluded that the construction and development plan for the completion of Phase I will require 20 months, and 25 months for Phase II. At this stage the project will generate sufficient energy to supply approximately the equivalent of 112 thousand homes. At 66 MW the annual savings to Nicaragua in importation of bunker oil will be approximately US$40 million per year.
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