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Enbridge Inc. buys 20% stake in Neal Hot Spring project for US$24m

Drilling rig at Neal Hot Springs, Oregon (source: US Geothermal)
Alexander Richter 8 Sep 2010

Canadian Enbridge Inc. enters partnership with U.S. Geothermal in its Neal Hot Springs geothermal project investing up to US$24m for a 20% stake in the project.

Announced today, “Enbridge Inc. entered into an agreement with U.S. Geothermal Inc. of Boise, Idaho to partner in the 35-megawatt (MW) Neal Hot Springs geothermal project. Enbridge will invest up to US$23.8 million for a 20 per cent interest in the plant. U.S. Geothermal will own the remaining 80 per cent.

The Neal Hot Springs geothermal project, developed by U.S. Geothermal Inc., is located in Malheur County, Oregon. U.S. Geothermal is constructing and will operate the facility. Construction of the project is underway and an in-service date of Q2 2012 is expected. The project will deliver electricity to the Idaho Power grid under a 25-year power purchase agreement.

“Enbridge is already heavily involved in renewable and alternative energy projects through our interests in 810 megawatts of wind, solar, waste heat recovery and fuel cell projects,” said Patrick D. Daniel, Enbridge President and CEO. “This investment will be our initial entry into geothermal energy, which we think has an important role to play in North America’s shift toward a greener energy production mix.”

“Our strategic partnership with Enbridge assures full financing for the successful construction and operation of the Neal Hot Springs geothermal project,” said Daniel Kunz, President and CEO of U.S. Geothermal Inc. “We look forward to a long and successful partnership with Enbridge on this and potentially other geothermal projects in our portfolio. Upon achieving commercial operation, Neal Hot Springs will be our third operating geothermal asset and will build upon our track record of successfully developing our existing pipeline of quality resources.”

Geothermal energy is renewable energy from the heat of the earth’s interior. The Neal Hot Springs geothermal project will recover this energy through a binary process that involves pumping hot water from a reservoir in the earth up through production wells. From the production wells, the water will go through closed circuit heat exchangers where it will boil a refrigerant liquid that will be sent through turbines to generate electricity. The hot water will then be injected back into the underground reservoir.

“Green energy is a key component in our plan to achieve a neutral environmental footprint as we grow our operations,” said Mr. Daniel. “In 2009 we committed to generating a kilowatt of renewable energy for every kilowatt of energy that our operations consume, and we are making good progress on that objective. We look forward to our relationship with U.S Geothermal and the potential that we may find further opportunities to partner together.”

Enbridge Inc. is a North American leader in energy delivery and one of the Global 100 Most Sustainable Corporations. As a transporter of energy, Enbridge operates, in Canada and the U.S., the world’s longest crude oil and liquids transportation system. The Company also has a growing involvement in the natural gas transmission and midstream businesses, and is expanding its interests in green energy technologies, including wind and solar energy projects, hybrid fuel cells and carbon dioxide sequestration. As a distributor of energy, Enbridge owns and operates Canada’s largest natural gas distribution company and provides distribution services in Ontario, Quebec, New Brunswick and New York State. Enbridge employs almost 6,500 people, primarily in Canada and the U.S. The Company’s common shares trade on the Toronto and New York stock exchanges under the symbol ENB. For more information, visit enbridge.com.

Source: Company release via Marketwatch