Mighty River invests US$124mill offshore

NZPA

Monday 21st March 2011

State-owned Mighty River Power had put US$124 million ($169.6m) into overseas geothermal projects by the end of last year, the company says in an interim report.

It had committed total capital of US$250m to international partner GeoGlobal Energy (GGE) to secure and develop geothermal projects overseas.

Progress was made on several projects during the six months to December, with the US$124m spent on eight geothermal reservoirs in three countries, the report said.

Through GGE, Mighty River had invested $US92m of a total potential commitment of US$107m in a US$400m project in southern California being developed by EnergySource, in which GGE had a 20 percent shareholding.

In Chile, Mighty River had committed US$66m to work in the Tolhuaca field, of which US$17m had been spent by the end of 2010.

GGE was also working on developing low temperature geothermal resources in Germany, and by the end of 2010 had a number of concessions in Bavaria. A total of US$11m had been put into German projects so far, the report said.

Mighty River said it was looking to lever the geothermal knowledge it had gained while developing $1 billion in new projects in the past five years. Geothermal now made up 31 percent of the company's total generation, four times the amount in 2007.

The company also noted its Waikato hydro operations had been complicated by drought and flood conditions during the half year, which created extreme volatility in the wholesale electricity market.

The variability of rainfall during the six months highlighted the need to look more broadly at the potential of water storage, the report said.

In the Waikato catchment, there was more than enough water for everyone's needs if the right investment was made in storage infrastructure.

"We are encouraged by the Government's plans in this area elsewhere in New Zealand and will be investigating opportunities to partner with others to investigate the potential of such water storage," the report said.

Mighty River increased its interim dividend to the Government to $64.7m from $56.2m a year earlier.

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