New drilling contract for up to 10 additional wells, Hellisheidi geothermal plant, Iceland

Hellisheidi geothermal power plant by Reykjavik Energy, Iceland (source: flickr/ thinkgeoenergy, creative commons)
Alexander Richter 6 Jun 2017

A new drilling contract has been drilled for up to 10 wells for the Hellisheidi geothermal power plant by ON in a bid won by geothermal drilling company Iceland Drilling.

Reported this morning, Icelandic energy company ON (Reykjavik Energy) and Iceland Drilling (Jardboranir) have agreed on drilling seven wells in the Hengil area in the coming years. An additional three wells can be added later to the contract if necessary.

The power from the ON power plants will be used to power the drilling rigs for the project, saving more than one million litres of oil compared to conventional methods.

For the companies, Bjarni Már Júlíusson, Managing Director of ON and Sigurdur Sigurdsson, CEO of Iceland Drilling signed the contract at the Hellisheidi geothermal power plant just outside of the capital of Iceland in Reykjavik. The drilling contract was tendered out in the European Economic Area earlier this year, with Iceland Drilling winning the tender with the lowest bid for the seven wells at ISK 2.6 billion (around $27 million, or around $3.8 million per well. It is expected that drilling will start this summer.

Drilling with electricity is part of the climate change target of ON

The agreement of the companies assumes that all of the holes will be drilled with electricity from the ON power plants, instead of diesel usually used for drilling activities of that kind. It takes about a month to drill one hole and the powerful drilling rig needs about 4,500 litres of oil per day. Therefore with the planned up to ten holes, this will save about 1.3 million gallons of diesel and thus 50,000 tonnes of carbon dioxide emissions. Using electricity for drilling its geothermal wells is one of the components of the climate objectives of ON. In addition, financial savings include using local electricity instead of imported oil.

The wells to be drilled are for steam production and re-injection. The water produced from the wells for power production is  returned to the geothermal reservoir to promote sustainable utilization of the geothermal resource. At Hellisheidi Power Plant, carbon dioxide and hydrogen sulphide from the geothermal gas are mixed with the processing water, which then is refuelled into the reservoir with the re-injection holes. The geothermal gas flows into the bedrock and is bound to all the future. We reported on these efforts previously on coverage of the CarbFix project, which has seen strong international interest.

Little has been drilled in recent years

ON operates wo geothermal power plants in the Hengil area; the Nesjavellir Power Plant (120 MWe), which was commissioned in 1990, and Hellisheidi Power Plant (303 MWe), with its first power plants, were launched in 2006. Both plants produce both electricity and hot water to fuel geothermal district heating systems for the capital area of Reykjavik.

Geothermal power plants require the drilling of so-called maintenance drills, as performance from individual holes can deteriorate for various reasons, and the geothermal areas change. Nesjavellir is supposed to drill a replacement hole every two-to-three years, with Hellisheidi power plant requiring one additional well per year. The plant is more than twice the size of the plant in Nesjavellir.

Concurrent agreements on drilling have ON agreed with IJ Landstak ehf. About drilling and other facilities for drilling. That work was also offered and the lowest bid was accepted.

Source: Reykjavik Energy