Origin steps up hot rocks investment

ORIGIN Energy has expanded its renewable energy portfolio, establishing a joint venture with hot rocks player Geodynamics aimed at leading to significant investment in developing geothermal energy in Australia.
Origin steps up hot rocks investment Origin steps up hot rocks investment Origin steps up hot rocks investment Origin steps up hot rocks investment Origin steps up hot rocks investment

Already a shareholder in Geodynamics, Origin has entered into a binding heads of agreement to take a 30% stake in an unincorporated joint venture covering Geodynamics’ South Australian geothermal tenements and associated assets, Origin managing director Grant King said today.

“We believe that geothermal energy will play an increasing role in securing the world’s future needs for clean energy,” King said.

“Geodynamics’ tenements are amongst the most prospective geothermal areas in Australia and include some of the hottest rocks in the world.”

King said Origin had consistently positioned itself to pursue growth opportunities in renewable energy and lower-emission technologies such as gas, and was committed to being Australia’s leading fuel-integrated energy company in an increasingly carbon-constrained economy.

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, the company said.

Origin said it will also commit to $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 within budget by March 31, 2008, Origin will commit a further $9.6 million. This would bring Origin’s total anticipated commitment to project expenditure over the next two to three years to about $150 million.

King said Origin intends to retain its 10% shareholding in Geodynamics, and also retain the rights acquired when it first invested in Geodynamics as a cornerstone shareholder.