Exploratory Drilling to start this month at Theistareykir project in North Iceland

Exploratory Drilling to start this month at Theistareykir project in North Iceland Drilling rig on site at Theistareykir, Iceland
Alexander Richter 14 Jun 2011

Iceland Drilling and Theistareykir ehf. (majority owned by Landsvirkjun), sign drilling contract for two exploratory wells to be drilled this summer at the Theistareykir geothermal project of up to 240MW in the Northeast of Iceland.

With the signing of a contract between Theistareykir ehf and Iceland Drilling (Jarðboranir), the boards of the National Power Company of Iceland (Landsvirkjun) and Theistareykir have agreed to substantially increase research with the preparation for a geothermal plant in the Northeast of Iceland this summer.

The goal of both companies is to speed up the collection of information about the potential steam output of the geothermal field at Bjarnaflag and at Theistareykir to meet increasing demand by potential electricity buyers in the region. Theistareykir is owned by Landsvirkjun, Okruveita Húsavíkur and the municipality of Thingeyjar. The work of exploratory drilling is to be permitted by the authorities.

The combined costs of Landsvirkjun and Theistareykir for the increased reasearch this summer is about ISK 500 million (US$4.4 million), while investments of about US$13.2 million in Northeast of Iceland have already been announced earlier this year.

In the release Hördur Arnarson, the CEO of Landsvirkjun, said that “these are the first research drilling efforts within the last three years and we are very hopeful that with those efforts we strengthen the information basis that has been built up in this area in recent years.” The mayor of the regional municipality Bergur Elías Ágústsson, says “this is a positive thing and a great step in the direction of attracting further energy intensive industries to the region.”

In the last ten years, Landsvirkjun and Theistareykir ehf. have spent about ISK10 billion (US$87million) in preparation and research of the geothermal fields at Theistareykir, Bjarnaflag and Krafla in the Northeast of Iceland. The plan for the summer 2011, was to drill one test well in the summer of this year, and now it has been decided to drill two. With that a further emphasis is put on collecting information about the possible steam output at the Theistareykir geothermal field and the possibility for quicker power plant development in the area.

Currently Bjarnaflag and Theistareykir provide steam for about 45MW capacity, while research suggests that the Theistareykir field will be able to supply steam for around 240 MW power capacity (median estimate). The test drilling is to confirm that the eastern part of the zone can supply a minimum of up to 90-100MW power generation. Before the year end Landsvirkjun plans to apply for a development license with the National Energy Authority (Orkustofnun) for a 45MW power plant at Bjarnaflag and Theistareykir ehf. for a 90-100MW plant at Theistareykir.

With this decision, Theistareykir ehf and Iceland Drilling have signed  an agreement for two 2,500 meter deep test wells at Theistareykir and the drilling rig Óðinn will be used for the drilling campaign. It is expected that drilling will start around June/ July and close in the fall.

Bent S. Einarsson, CEO of Iceland Drilling commented, “we have had a good cooperation with both these customers before and are hopeful that the results of exploratory drilling will be satisfactory to allow for the further use of environmentally friendly energy and increased value creation.”

The Environmental Impact Assessment has been completed for a power plant of up to 200MW at Theistareykir. The overall zoning of the municipality is now waiting for the evaluation by the relevant authorities and later the approval by the Minister for the Environment.

Source: Landsvirkjun (in Icelandic)