Operator Petratherm has signed a letter of intent for Ensign International Energy Services to secure a suitable rig and undertake deep drilling on the Paralana hot rocks project in South Australia’s far north.

Petratherm has long said its Paralana project area had a very effective layer of insulating sedimentary rocks immediately above the radiogenic granite that is producing the high temperatures necessary for power production.

This insulating layer is hot enough for power production in its own right and can be more easily fractured than the basement granite. Therefore Petratherm would not have to drill as deep as other hot rocks developers, the company has said.

But managing director Terry Kallis said today that the initial heat exchanger well could be drilled as deep as 4km.

“We can get the temperatures we need at 3.5km, but we will drill down as far as 4km to check out the geology,” he said.

“We’re looking for the area that has the best permeability so we can make the best decision on where to fracture the rock.”

Kallis said Petratherm’s initial drilling and testwork has already proven up Paralana’s heat profile.

A recently completed major seismic study and other surveys are aimed at deciding where best to locate the heat exchanger well, and how best to develop the Paralana geothermal field.

The aim now is to establish the heat exchanger for the project where fluid is heated at depth as it circulates between an injection and production well, to produce heat at surface for eventual use in driving turbines.

In Paralana’s initial commercial phase, Petratherm and Beach plan to deploy a 7.5MW power station at a nominal cost of about $50 million.