Petratherm gets $57m incentive

Adelaide Advertiser
Tuesday 5/8/2008 Page: 31

Petratherm has received a large boost with TRUEnergy committing to invest $57 million for a 30 per cent stake in its Paralana geothermal project. Its shares jumped 12.3 per cent to 73c cent on the news. Adelaide-based Petratherm yesterday said Chinese-owned TRUEnergy would initially contribute $6 million towards the drilling of two geothermal energy wells, for a 10 per cent stake in the project in the northern Flinders Ranges.

It would have the option to earn another 5 per cent by contributing $7 million towards the development of a 7.5 megawatt pilot plant. This would be able to supply power to the nearby Beverley uranium mine as early as mid-2010. The final 15 per cent would be earned through the contribution of $44 million towards a 30MW demonstration plant.

TRUEnergy supplies gas and electricity to 1.3 million homes and businesses in Victoria, SA and NSW and also generates electricity in SA and Victoria. TRUEnergy managing director Richard Mclndoe said the company had committed close to $1 billion to expand its renewable and clean energy generation portfolio. This included a $292 million development agreement with photovoltaic cell maker Solar Systems to develop a 154 MW solar electricity plant in Victoria.

"The strategy has been to look at what we consider to be the leading renewables companies in the marketplace to try and bring TRUEnergy's marketing capability and other capabilities as a major energy generator and retailer to the table," Mr Mclndoe said.

Petratherm managing director Terry Kallis said the company had been looking for complementary business partners. Last year Beach Petroleum committed up to $30 million to the Paralana project in return for a stake of up to 36 per cent. The TRUEnergy deal is dependent on Foreign Investment Review Board approval.