Iceland Drilling signs large US$ 26 m, 2-year contract in New Zealand
Drilling rig, Tyr Drillmec HH-300 (source: Iceland Drilling)
Alexander Richter
9 Jun 2011
Icelandic geothermal drilling specialist Iceland Drilling (Jarðboranir) just secured a US$ 26 million 2- year drilling contract with New Zealand based Mighty River Power for the drilling at its newly announced Ngatamariki geothermal power plant project.
As announced by the company today, Icelandic geothermal drilling specialist Iceland Drilling just signed a large contract with New Zealand power company Mighty River Power.
Mighty River Power announced earlier this week that it will go ahead with the investment of US$380 million for the Ngatamariki geothermal power plant in New Zealand. Ormat Technologies was signed on as an EPC provider for about US$130 million.
Over the last decade, Iceland Drilling has been one of the – if not the – geothermal drilling company in the world. The drilling contract is worth about ISK 3 billion (US$26m) and for 2-years. Iceland Drilling (Jarðboranir) was successful in this international tender for the contract.
This means that Iceland’s largest drilling rig will be shipped from Iceland to New Zealand, essentially to the other end of the world, to drill wells for the planned Ngatamariki geothermal power plant, with initially planned 82 MW in capacity. 30 Icelandic specialists will be located in New Zealand.
This is fantastic news for the company, but means a big loss for Icelandic geothermal development as it essentially cuts down the drilling rig fleet available for development in Iceland. With further international development and contracts secured by Iceland Drilling, the country will see the departure of not just one drilling rig. This might delay some of the development in Iceland, or make it more expensive as other drilling equipment will have to be secured from somewhere or somebody else.
Mighty River Power is one of the largest energy companies in New Zealand and has in a way similar to Icelandic efforts in 2007 and 2008 started to invest internationally through a company called GeoGlobal Energy, which is involved in development projects in Germany, U.S., and Chile.
The contract is probably one of the biggest geothermal drilling contracts so far with a total value of around $26 million (ISK 3 billion), and is expected to be signed later this month and runs for a minimum of 2 years.
The company will drill at the Ngatamariki field about 17 km northeast of the Taupo lake on the North Island of New Zealand, with initially planned 82 MW of capacity planned but extensions planned in stages.
Iceland Drilling will ship its biggest drilling rig “Týr” to New Zealand and send about 30 company employees to work on the project and preparation for drilling.
Bent S. Einarsson, the CEO of Iceland Drilling said, that “this an excellent outcome and means the biggest and the most ambitious project that we as a company have secured internationally. Iceland Drilling was successful in an international tendering process and chose over a number of other drilling companies. Mighty River Power required technical know-how and experience, international certification for environmental and security issues, as well as experience of similar projects. We as a company fulfilled those requirements and experienced that Iceland Drilling enjoys the trust on the international drilling market, last but not least because of the decades long experience of the company in Iceland and beyond.”
The project in New Zealand strengthens the project pipeline for Iceland Drilling and will strengthen the company with further international activities, as New Zealand is an exceptionally interesting market. “We have worked hard on positioning Iceland Drilling in New Zealand and now see the results. New Zealanders are putting an increased emphasis on increasing the renewable energy share in the country and they realize the economic and environmental benefits geothermal energy as an energy source can provide. New Zealand is on the forefront of geothermal development and is determined to continue driving development.”
The Managing Director for Business Development of Mighty River Power, Mark Trigg said: “It is a great gain for us to win a drilling company from Iceland that has so much experience in geothermal drilling, as well as moving a new generation of drilling equipment to New Zealand that is more automatic and efficient then the drilling equipment that has worked so far in the country. Gaining this equipment is not only an important addition of drilling equipment used at the Ngatamariki geothermal field, but it is also planned to use it for research drilling in new fields and the re-drilling of some older wells.
Mighty River Power was established in 1998, after New Zealand split the Electricity Corporation of New Zealand (ECNZ) into 3 energy companies owned by the state, and the company can be traced back until 1913.
Source: Company announcement
