Australia's Geodynamics-Kentor Joint Venture Prepares Exploration Drillings for Savo Island Geothermal Project

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Researched by Industrial Info Resources Australia (Perth, Australia)--A joint venture between Geodynamics Limited (ASX:GDY) (Brisbane, Australia) and Kentor Energy Pty Limited (Brisbane), a subsidiary of Kentor Gold Limited (ASX:KGL), plans to begin drilling exploratory wells for its planned 20- to 30-megawatt (MW) geothermal power plant project, following the completion of an environmental and social impact assessment in February.

Sinclair Knight Merz (SKM) (Sydney, Australia), a subsidiary of Jacobs Engineering Group (NYSE:JEC) (Pasadena, California), conducted the assessment.

The power plant would be located on southeast Savo Island, a part of Solomon Islands. Savo Island is 14 kilometers (km) off the coast of Guadalcanal and 35 km north of Honiara. Preliminary studies that were conducted in April 2013 indicate that the volcanic island could host a substantial geothermal reservoir at temperatures in excess of 260 degrees Celsius and at depths of 500 to 1,500 meters.

The joint venture plans to begin drilling four exploratory wells by June to verify the geothermal resources, which would help the venture finalize the specifications for the power plant. Geodynamics plans to sign a power-purchase agreement with the Solomon Islands Electricity Authority (SIEA) in a few months.

The Savo Island project could be capable of supplying all base load power to the region. Honiara has a peak consumption of 14 MW, with an average base load of 8.5 MW. The Gold Ridge Mine is a major energy consumer on Guadalcanal, with 12 to 18 MW of consumption. Electricity would be transmitted from Savo Island to the city of Honiara via a 35-km sub-sea cable, at a depth of 500 to 750 meters.

The earn-in joint venture between the Geodynamics and Kentor was signed in November 2012. Geodynamics holds a 25% interest, with the ability to have as much as 70%. Geodynamics is also at work developing the environmental and social impact assessment for its two-phase, 8-MW geothermal power station project at Vanuatu Islands.

Geodynamics plans to kick off construction by the third quarter of 2015 and begin supplying power by 2017.

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