Australian energy major Origin Energy has announced the strategic expansion of its renewable energy portfolio by establishing a joint venture with Geodynamics to develop geothermal energy.
Origin has entered into a binding heads of agreement to take a 30% stake in an unincorporated joint venture covering the South Australian geothermal tenements and associated assets of Geodynamics. The 30% stake in the joint venture will see Origin provide technical and related support through its extensive experience in upstream gas exploration and production, gas-fired power generation and through its exposure to geothermal power generation in New Zealand.
Origin will commit to A$96 million of joint venture project expenditure, in addition to its 30% share. If Geodynamics, as operator, completes its stage one ‘proof of concept’ phase by March 31, 2008 and within budget, Origin will commit a further A$9.6 million. This would bring Origin’s total anticipated commitment to project expenditure over the next two to three years to about A$150 million.
Grant King, managing director of Origin, said: We are very pleased to be part of this exciting future for geothermal energy in Australia and to be able to bring our considerable experience and resources to this project.
We believe that geothermal energy will play an increasing role in securing the world’s future needs for clean energy. Geodynamics’s tenements are amongst the most prospective geothermal areas in Australia and include some of the hottest rocks in the world.