U.S. Geothermal reports on progress of its construction of the 22 MW Neal Hot Springs geothermal power project in Oregon and adjustments at San Emidio, expecting finishing work on both in 2012.
Geothermal developer U.S. Geothermal Inc. (HTM) reports on the construction work for the company’s new 22 net megawatt (“MW”), air cooled power plant at Neal Hot Springs, located in Malheur County, Oregon and the newly completed 8.6 net MW, water cooled power plant at San Emidio Unit I located in Washoe County, Nevada.
Construction work at the Neal Hot Springs power project is approximately 93 percent complete and is scheduled to achieve a commercial operation date (“COD”) in the fourth quarter of 2012. To address a specific vibration issue in the turbine gearbox, adjustments to the three generating modules of the power plant are occurring based on similar adjustments that are currently taking place at San Emidio Unit I.
The adjustments include replacing a pair of high-speed turbine gearbox shaft bearings with larger ones and adding a “swirl break” behind the turbine wheel. The swirl break is designed to disrupt an unwanted pressure wave identified by the turbine manufacturer. At San Emidio the EPC contractor also discovered a problem with the silencer and has developed a replacement unit that will be installed during the current shutdown. The silencer issue will also be evaluated at Neal Hot Springs.
Drilling for the remaining injection capacity at Neal Hot Springs began on June 12 at well NHS-14 which was drilled to a depth of 1,688 feet. The well encountered modest permeability and is being evaluated as to its injection capacity. Drilling then moved to well NHS-4 which successfully intersected major permeability in reservoir formation at a depth at 5,960 feet. Initial flow test results indicate that NHS-4 is a significant injector. One additional injection well, scheduled to begin next week, is expected to complete the drilling program. To date, approximately 85 percent of the required injection capacity has been drilled.
At San Emidio, Unit I achieved COD May 25 and has been earning revenues since then. The current shutdown began July 27 and is expected to be complete mid August. While the shutdown reduces revenues in July and August, the plant operates at high availability when online. Discussions are currently underway with the EPC contractor for a final settlement of the contractual delay issues and the construction loan. A take out lender has provided an attractive term sheet for long term project finance to replace the existing $30 million construction loan. The parties expect to complete the long-term financing in about 90 days.
Daniel Kunz, Chief Executive Officer of U.S. Geothermal Inc., said, “The progress underway is consistent with our plan to finish the ongoing construction and adjustments at San Emidio and Neal Hot Springs this year to provide the company stable revenue and earnings in 2013. Our focused and very experienced development and operations teams at U.S. Geothermal have now constructed and will be operating three geothermal power projects since completing Raft River in 2008.”
Source: Company release via finance.yahoo