Dec 20 2007
Origin Energy today announced a strategic expansion of its renewable energy portfolio, establishing a joint venture with Geodynamics that will see significant investment in the development of geothermal energy in Australia.
On 29 October 2007 Origin Energy announced it had entered into an agreement to take a 30% stake in an unincorporated joint venture covering the South Australian geothermal tenements and associated assets of Geodynamics Ltd.
The agreement was subject to approval by Geodynamics shareholders.
Origin is pleased to advise that at an Extraordinary General Meeting of Geodynamics shareholders held on 19 December the agreement was approved and that there are no outstanding conditions precedent to the agreement between Origin Energy and Geodynamics taking effect.
“We believe that geothermal energy will play an increasing role in securing the world’s future needs for clean energy. Geodynamics’ tenements are amongst the most prospective geothermal areas in Australia and include some of the hottest rocks in the world.
“Origin has consistently positioned its business to take advantage of the growth opportunities in lower emission technologies such as gas and renewable technologies such as solar and geothermal. Combined with our position as Australia’s leading retailer of GreenPower, these investments continue to demonstrate our commitment to being Australia’s leading fuel-integrated energy company in an increasingly carbon-constrained economy,” Mr King said.
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.
Origin will 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 by 31 March 2008 and within budget, 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.
At this time 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.
The joint venture represents a strategic expansion of Origin’s renewable energy portfolio and continues to demonstrate the company’s commitment to being Australia’s leading fuel-integrated energy company in an increasingly carbon-constrained economy.