NZ’s Mighty River investing in Chile development

Alexander Richter 13 Mar 2009

NZ Mighty River Power has spent US$6.7 million to help fund drilling by its GeoGlobal Energy LLC associate in the Tolhuaga permit in southern Chile.

As reported today by Bloomberg, New Zealand’s Mighty River power has announced spending US$6.7 million to help fund geothermal drilling in Chile.

The article talks about that, “The government-owned company has spent US$6.7 million to help fund drilling by its GeoGlobal Energy LLC associate in the Tolhuaga permit in southern Chile, Chief Executive Officer Doug Heffernan said today. GeoGlobal is planning to bid for rights in the Puchuldiza region in the country’s north and will seek other concessions, he said.

New Zealand, one of the first developers of large-scale geothermal power generation, lies on the “ring of fire,” a volcanic zone around the Pacific, and gets 9 percent of its electricity from underground steam. Chile, home to more than 5 percent of the world’s active volcanoes, is encouraging geothermal development after dwindling gas supplies from Argentina forced it to widen its energy sources.

Chile has “significant resources, in scale much bigger than in New Zealand, and that’s the opportunity, to get in at the front-end of that,” Heffernan said on a conference call with journalists.

State-owned Mighty River, based in Auckland, operates three geothermal power stations in New Zealand and is installing a Sumitomo Corp. generator at a fourth site. It bought a 25 percent stake in Denver, Colorado-based GeoGlobal last year as part of a strategy to profit from its expertise in drilling, developing and operating steamfields.

Ormat, Antofagasta: Chile may need to build 10,000 megawatts of new generation in the next 10 years, and as much as 20 percent of that may come from geothermal, GeoGlobal said on its Web site.

Eight groups, including generator maker Ormat Technologies Inc. and a venture of state-owned oil company Empresa Nacional del Petroleo and copper miner Antofagasta Plc, sought data for the Puchuldiza tender, the nation’s Ministry of Energy & Mines said last month. Bidding closes March 31.

GeoGlobal has “significant intellectual muscle-power” while Mighty River has 10 years experience as a plant developer and operator, Heffernan said. That technical capability means the venture will be as strong, if not stronger than most rivals, he said.”

Source: Bloomberg