Maibarara partners to invest $10M

MANILA, Philippines - The proponents of the Maibarara geothermal power project has committed to invest $10 million more to further explore the potential reserves in Batangas and Laguna.

The project is a proof to the commerciality of geothermal projects in the country, an official of the Department of Energy (DOE) said.

“The commitment is to drill two wells next year to determine additional capacity,” DOE undersecretary Jose Layug said.

Benchmark investment per drilling in geothermal projects cost between $4 to $5 million, bringing the new exploration’s value at $10 million, Layug said.

Last week, proponents PetroEnergy Resources Corp. Tran-Asia Oil and Energy Development Corp. and state-run PNOC Renewables Corp. secured a DOE approval to drill two new wells in the Maibarara contract area.

“One well will be used as a steam producer and the other will serve as a reinjection well for condensate fluids,” Trans-Asia Oil said.

The groundbreaking ceremony for the 20-MW Maibarara geothermal plant was held last week. Commercial operation is scheduled to start in 2013, which will add new capacity to the Luzon grid.

“It is the first project under the Renewable Energy Act (of 2008) that went into declaration of commerciality,” Layug said.

The declaration of commerciality is granted after a successful two-year feasibility study.

Layug said the Maibarara project is not depending on feed-in tariff for its commercial viability.

The feed-in tariff scheme, whose implementation is already delayed by almost three years, guarantees investments of renewable energy firms through fixed rates that would be shouldered by consumers over a set period of time.

These fixed rates will be available to projects involving solar, run-of-river, hydropower, biomass and ocean wave energy.

Layug said the DOE is looking at the eligibility criteria for other firms’ renewable energy project proposals.

In September, PetroEnergy Resources signed a P2.4-billion, long-term loan facility for Rizal Commercial Banking Corp. and Bank of the Philippine Islands to finance the geothermal project.

Late last year, PetroEnergy Resources decided to abandon its wind energy project in Sual, Pangasinan after tests showed the area is not commercially feasible for wind power.