Aragorn Power gets 1-year extension for $300-M Apayao geothermal project

MANILA, Philippines — The Department of Energy (DOE) has granted Aragorn Power and Energy Corp. (APEC), the power unit of Sy-led APC Group Inc., a one-year contract extension for its $300-million geothermal project in Kalinga, Apayao.

In a disclosure, APC said APEC received a letter from the DOE approving the contract term extension of its geothermal renewable energy service contract (GRESC) 2010-03-024.

“In its letter, the DOE noted that APEC has substantially performed its work commitments and approved the GRESC contract extension until Sep. 24, 2018,” APC said.

APEC was granted a five-year geothermal service contract located in Kalinga province in 2008, but this was converted into a GRESC in late March 2010 to avail of the incentives provided under the Renewable Energy (RE) Act of 2008.

The project involves the development of steam fields that can generate around 100 megawatts (MW) of new capacity, providing an additional source of clean, indigenous and reliable baseload power to the Luzon grid.

The company has filed an application with the DOE to renew its contract, which expired in September 2016.

Under its work program, APEC has completed geochemical and geophysical surveys covering Sub-phases 1 and 2.

As of March this year, the firm is already in the preliminary stage of Sub-Phase 3. It has also secured the consent of nine out of 11 ancestral domains covering 85 percent of the geothermal service contract area.

In preparation for Sub-Phase 3, APEC has secured a certificate of non-coverage for the access roads construction, improvement of existing roads and drilling of well pads from the Department of Environment and Natural Resources (DENR).

“The surveys for the detailed engineering design of these roads and well pads have been completed. Accordingly, activities such as right-of-way negotiations, supplier bidding and contract preparations related to the road construction and drilling will follow,” APC said.

To pursue the project development, APEC and its partner Guidance Management Corp. (GMC) partnered with Chevron Kalinga Ltd. (Chevron), 100 percent subsidiary of Chevron Geothermal Philippines Holdings Inc., in November 2010. The latter will operate the power plant and explore and develop the steam field.