PNOC unit eyes geothermal contract in PNG

PNOC-Energy Development Corp. (EDC) is bidding for the drilling contract of 11 more wells and construction of a geothermal power plant in Papua New Guinea (PNG).

EDC chairman and president Sergio Apostol said it would offer its expertise to Papua Guinea’s premier geothermal company, Lihir Management Co. (LMC), to construct and operate geothermal power plants in the country.

The estimated project cost for the drilling of steamfield and construction of 20-megawatt (MW) power plant is $40 million ($1 million per MW for the steamfield and $1 million per MW for the power plant).

According to Apostol, it will take EDC at least two years to finish the project. He said Lihir and EDC have been partners in drilling wells only. But now the project will also involve putting up of a geothermal power plant.

The EDC chief has expressed optimism that the company would win the contract. "We have a very good chance given our expertise in geothermal development," he said.

A special EDC team will be sent to PNG in the middle of January 2003 to observe well testing.

"LMC was impressed with EDC’s drilling performance in terms of timeliness, safety and cost efficiency. Further, we are recognized internationally as one of the best in geothermal development. Hence, we were invited to bid for the construction and operation of what would be the first geothermal power plants in PNG," he said.

EDC started its drilling operations in Lihir Island, New Ireland Province in PNG in 1999. It is now on its third contract with LMC for the drilling of geothermal, steam relief and dewatering wells. "After we successfully fulfilled the requirements of the first contract, LMC, instead of bidding out the additional contracts, negotiated with EDC to continue the drilling of several wells," he said.

The geothermal development arm of the Philippine National Oil Co. has just completed its 23rd geothermal well in Lihir.

As of November 2002, the state-owned firm has already generated P694 million in revenues from its contracts with LMC.

PNG is dependent on diesel-fired power plants for its energy needs. Most of these plants, however, have already reached maximum capacity. Hence, PNG is looking at geothermal as an alternative source of energy for the long-term.

After Indonesia, PNG is the second country where EDC has exported its drilling expertise.