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HS Orka receives 50MW Fuji turbine for Reykjanes plant

HS Orka receives 50MW Fuji turbine for Reykjanes plant Arrival of HS Orka's Fuji 50 MW Turbine in Iceland (source: Magma Energy)
Alexander Richter 29 Jun 2010

HS Orka receives a 50 MW Fuji Electric turbine generator for its Reykjanes power plant which currently produces 100 MW from twin Fuji units, and is to expand to 180MW.

Magma Energy Corp. (TSX: MXY) provides an update at its 46.18% owned HS Orka’s operations in Iceland. Magma expects to increase its stake in HS Orka to 98.53% by the end of July.

HS Orka recently took possession of a 50 MW Fuji Electric turbine generator for its Reykjanes power plant which currently produces 100 MW from twin Fuji units. HS Orka plans to expand Reykjanes output to 180 MW in 2 phases pending permitting and new power purchase agreements with power off-takers. A 50 MW (phase 1 expansion) is expected to come on-line in 2012. More than 15 MW of steam has already been drilled for this expansion project. An additional 30 MW phase (to bring output to 180MW) is scheduled for 2013 and requires no additional drilling as the feedstock is low pressure steam generated from current operations. In addition to these expansion projects, plans to develop additional resources to increase total production to 405 MW by 2016 is underway.

Drilling for additional power plant expansion capacity is underway. Well REY-29 is currently at a depth approaching 3,000 meters and has encountered temperatures exceeding 315 degrees C. Initially, this well was targeted to be a field reinjection well and was drilled at the edge of the known geothermal reservoir. It now appears that a new geothermal production area has been discovered adjacent to the 100 MW Reykjanes plant. Testing of the well will continue over the next several weeks and a reservoir estimate will be prepared for this potential resource.

The budget for the 50 MW expansion is $116 million, of which $32 million has already been spent as of May 31. The remaining cost for the expansion is expected to be funded from HS Orka’s cash on hand and by debt financing.

Asgeir Margeirsson, Magma Iceland’s CEO commented, “The teams at Magma Iceland and HS Orka are working well together on planning the new power projects in front of us. We are excited to see the new turbine at Reykjanes and very pleased with the encouraging results from our latest well.”

Source: Company announcement