Chevron, APC plan to put up geothermal power plant in Kalinga

Global energy giant Chevron is planning to put up a geothermal power plant in Kalinga in partnership with the APC Group, the power and infrastructure affiliate of Belle Corp.

Chevron, however, will have to drill four wells in its service area first to confirm surveys on its steam energy resources before the group can finalize the details of the planned power plant, APC Group chairman and president Willy Ocier said.

The rule of the thumb in estimating the cost of building a geothermal plant provides that a megawatt of generating capacity will require an investment of $3 million, such that a 100-MW plant will cost $300 million, Ocier said.

Based on APC’s annual report, the drilling of exploratory wells would be started by the fourth quarter of 2013. The exploration will take about eight months to complete, or up to the second quarter of 2014. If the results of the exploration wells prove positive, construction of the power plant will immediately start.

In November 2010, APC and partner Guidance Management Corp. (GMC) tied up with Chevron Geothermal Philippines Holdings in exploring and developing the geothermal area in Kalinga.

The parties signed a farm-in and joint-venture agreement that gave APC and GMC the option to take an equity position of up to 40 percent in the geothermal project.

Under the agreement, Chevron will be responsible for the exploration, development and operation of the steam field and power activities. The initial plan was to develop steam fields that can generate 100 MW in new capacity, providing an additional source of clean, indigenous and reliable baseload power to the Luzon grid, based on APC’s annual report.

“We’ve secured all IP [indigenous people] approvals for Kalinga,” Ocier said, referring to the 26,000-hectare service area.

“We’re on schedule. We’re still holding on to the 2017 (targeted) activation of the power plant,” he said.

APC’s geothermal service contract with the Department of Energy in Kalinga was converted into a Geothermal Renewable Energy Service Contract (GRESC) in 2010 to enable the company to avail itself of the incentives provided under the Renewable Energy Act of 2008.

The Kalinga project is one of the three geothermal service projects where APC is involved in. The two others are in the Mt. Province and Benguet.

It is possible for the planned power plant to draw geothermal steam from these other areas, Ocier said.

In March 2010, the GRESCs for Bontoc (Mainit)-Sadanga in Mt. Province and Buguias-Tinoc in Benguet and Ifugao Provinces were awarded to PRC-Magma Energy Resources Inc., in which APC has a 33-percent equity interest. The GRESC area is located southwest of the Kalinga GRESC.

The Bontoc (Mainit)-Sadanga geothermal project has a total area of 58,911 hectares and a power-generation potential of 60-100 MW. From the initial investigations, two volcanic centers representing two separate geothermal reservoirs are possibly present, based on APC’s annual report.

The Buguias-Tinoc GRESC has a total area of 35,424 hectares covering two municipalities of Benguet and another two municipalities of Ifugao. It also has a power-generation potential of 60-100MW.