In its quarterly report, the company said its board has approved Phase 3 of its Paralana geothermal project in South Australia, which involves drilling two new 3.6-4km deep wells to establish the expected thermal resource, undertake a circulation test and establish an underground heat exchanger. As a result, Petratherm said it is continuing negotiations to secure a suitable drill rig for this work.
Yesterday, the company announced that its Paralana project may have found a potential customer. Petratherm has signed a memorandum of understanding with Heathgate Resources, which operates the Beverley uranium mine 11km away in the Flinders Ranges, north of Adelaide.
If successful, Paralana would supply electricity to help meet the mine’s growing energy needs.
“The MoU enables Heathgate and Petratherm to consider and negotiate a range of options – size and timing of the plant – and contemplate the commercial agreements that might underpin those options to meet both companies’ respective needs,” Petratherm managing director Terry Kallis said.
“Our objective is to be able to supply Beverley with electricity at equal to, or lower in price than alternative sources including existing supply sources.”
In August, Petratherm confirmed that its Paralana-1 geothermal test well – now 1.8km deep – had recorded one of the country’s highest hot rock temperatures.
That result paved the way for Petratherm to move to the next stage of the project –drilling two new wells nearby to Paralana-1 but up to twice the depth of the test well, to prove up the expected thermal resource, undertake circulation tests and establish an underground heat exchanger.
Under this trial heat exchange program, water would be pumped from surface down one of the new wells and circulated through hot rocks at approximately 3.6km depth. It would then be returned to surface via the second well as superheated water, able to produce steam to drive electricity generators.
The drilling and circulation work would be a precursor to developing an electricity generation plant at Paralana of around 7.5MW capacity to supply local demand – including to potential key customers such as Heathgate or delivering into the State’s main electricity grid infrastructure.
Looking to China
While its flagship project continues moving ahead, Petratherm has also revealed this week that it has become the only geothermal energy company to secure endorsement from the Asia Pacific Partnership on Climate and Clean Development (AP6).
AP6 comprises member governments from the United States, China, India, Japan, South Korea and Australia.
The endorsement has given Petratherm the right to help China best determine if, how and where hot rocks-generated power can help service that country’s booming energy requirements.
It will spend the next nine months on the ground in China identifying potential hot rock sites.
Kallis said the company would then hope to take an equity position in those sites it thinks offer the best potential to host commercial-based power generation from hot rocks.
“Formal approval of the project not only signals the support of the AP6 members but in particular the support of the Australian and the Chinese governments,” he said.
“This is a breakthrough consistent with Petratherm’s strategy to identify opportunities in Australia and internationally where both the local geology and renewable energy policy framework are conducive for commercial geothermal energy projects.”
