Icelandic Orka Energy to collaborate more closely with Sinopec on geothermal development

Icelandic Orka Energy to collaborate more closely with Sinopec on geothermal development Signing ceremony of Orka Energy and Sinopec in April 2012 (source: Orka Energy)
Alexander Richter 9 May 2012

Icelandic Orka Energy and Sinopec Star Petroleum Company sign agreement on expanding cooperation on geothermal development for heating and power generation in and outside of China.

Today, Fu Chengyu, Chairman of the Board of Sinopec Group, and Haukur Hardarson, Chairman of the Board of the Icelandic company Orka Energy Holding ehf, signed an agreement that expanded their cooperation in harnessing geothermal energy for domestic heating, electricity production and other related projects within and outside China. These parties jointly own Shaanxi Green Energy Geothermal Development Co. Ltd., also known as SGE, which has been operating in China since 2006. The Premier of China, Wen Jiabao and Prime Minister of Iceland Jóhanna Sigurdardóttir, witnessed the signing of the agreement in The Icelandic Culture House.

Sinopec Group is China’s largest petroleum and petrochemical company and the fifth largest company in the world according to the Fortune Global 500 for 2011. Its main operations are related to the production and distribution of oil, gas, coal and other sources of energy, along with a variety of related operations and various chemical industries. In recent years, the company has directed its attention to harnessing geothermal power and sustainable energy production through its subsidiary Sinopec Star Petroleum Company Limited, which has a 51% holding in SGE together with the 49% holding of Orka Energy. Orka Energy became involved in the project last year when it acquired the operations of Geysir Green Energy and REI.

SGE has about 260 employees, and the company currently heats in excess of 6 million m² of commercial and residential buildings with geothermal power. The newly made agreement allows for the company’s owners to invest up to an additional USD 60 million going forward. The plan will expand heating operations to a target of 30 million m² by the end of 2015 and 100 million m² by the end of 2020. In addition to this, a project will be launched related to electricity production and to other environmentally friendly uses of geothermal power.

Fu Chengyu, Chairman of the Board of Sinopec Group said, “I’m extremely pleased with the ambitious objectives set by SGE for the coming years. Cooperation with Orka Energy has worked well, and it is both enjoyable and inspires confidence to have Icelandic ingenuity and knowledge by our side for the tasks ahead of us.”

Haukur Hardarson, Chairman of the Board of Orka Energy remarked, “This agreement underlines the good cooperation that has existed between the parties in the past years and the reciprocal trust that has developed between us. We will make every effort to employ, in a variety of ways, the significant knowledge that exists in Iceland on harnessing geothermal energy, both through consultancy and through participation by Icelandic parties in the development and operation of geothermal projects throughout the world.”

Source: Release of Orka Energy