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Ormat receives US$130 EPC contract for Ngatamariki/ Mighty River Power project

Preliminary visualisation of the proposed Ngatamariki Geothermal Power Station (flash plant option) (source: Mighty River Power)
Alexander Richter 10 Jun 2011

Ormat Technologies signs $130m supply and EPC contract with Mighty River Power for the Ngatamariki geothermal project, the company's largest EPC contract for one geothermal plant.

As reported earlier this week on the Ngatamariki project of Mighty River Power, Ormat Technologies, Inc. (NYSE: ORA) received the EPC contract for the project.

In the release of the company it says, that this is “the largest product order in the company’s history. The Supply contract and the Engineering, Procurement and Construction, (EPC) contract, signed by two of its subsidiaries with Mighty River Power Limited (Mighty River Power) of New Zealand, are for the first stage of the Ngatamariki geothermal project valued at a total of approximately $130 million. The new power plant is to be constructed on the Ngatamariki Geothermal Field in New Zealand. Construction of the power plant is expected to be completed within 24 months from the contract date.

Dita Bronicki, CEO of Ormat Technologies said, “This marks the largest EPC contract that Ormat has ever entered into for one geothermal plant. Our backlog since the beginning of the year has more than doubled and, as of the beginning of the second quarter, stands at record high of over $230 million. Accordingly, we are increasing our Product Segment guidance for 2011 by approximately 15 percent to between $90 million and $100 million.”

Mighty River Power, a state-owned enterprise, is a New Zealand electricity generation and electricity retailing company and one of the most experienced geothermal operators in the world. Geothermal energy represented 33 percent of Mighty River Power’s overall generation in the last quarter — a total that is expected to grow to approximately 43 percent by 2013, following the completion of the new power plant.

Mrs. Bronicki continued, “We are very proud to receive this repeat contract which demonstrates the confidence Mighty River Power and its Maori Trust partner have in our technology, experience and knowledge. We have a long-standing relationship with both and are excited for the opportunity to, once again, work with the Mighty River Power geothermal team to deliver another strong performing power plant on schedule.”

Mighty River Power’s Chief Executive Dr. Doug Heffernan said, “Our Company is now seeing the benefits of the near NZ$1 billion investment it has made in geothermal generation over the past five years flowing through to the Company’s financial performance as exampled by the 22 percent uplift in earnings, (EBITDAF) recorded for the six months to 31 December, 2010. The Ngatamariki project will allow us to continue that growth trend by building on the core competency we have now developed in geothermal. We are particularly pleased to have placed the contract for the design, supply and construction of plant with Ormat and look forward to another great project delivery from this very experienced team.”

Lucien Bronicki, chairman and CTO of Ormat Technologies, Inc., said, “New Zealand is one of the early pioneers in geothermal energy development. For the past forty years, it has been the country with the most consistent policy of support for geothermal energy and has developed advanced expertise in drilling, geophysics, reservoir engineering, as well as operations. NZ consulting firms assisted many developing countries such as the Philippines, Kenya and Indonesia in geothermal development. Because of their extensive knowledge, New Zealand companies recognized very early, some 25 years ago, the value of Ormat’s technology and experience in optimizing resource utilization. The cooperation between New Zealand’s geothermal companies and Ormat has continued since then and also in other countries.”

Mr. Bronicki concluded, “Ormat has supplied technology and plants adapted to various types of geothermal fields to all of New Zealand’s key geothermal players. We view this milestone as a demonstration of the effectiveness and reliability of Ormat’s technology, as well as a trust in our accumulated geothermal knowledge and experience. The completion of this power plant will bring the total installed capacity of Ormat’s technology in New Zealand to approximately 350 MW in 14 plants. We look forward to a fruitful cooperation with Mighty River Power in this project and in further developing geothermal resources in New Zealand and around the world.”

About the Ngatamariki Geothermal Project: The new power plant will be comprised of four air-cooled Ormat Energy Converters and will allow 100 percent geothermal fluid reinjection, which serves both to sustain the reservoir and to produce electrical power with virtually no environmental impact. The specification and special technical requirements for this power plant are based upon Mighty River Power’s and Ormat’s long professional experience in geothermal development.”

Source: Ormat release via PR Newswire