Aragorn, Chevron close farm-out deal for Kalinga power project

Aragorn Power and Energy Corp., a subsidiary of listed APC Group Inc., has signed agreements with Chevron Kalinga Ltd. of Chevron Geothermal Philippines for a 100-megawatt (MW) integrated geothermal power project in Kalinga. Aragorn, together with its partner Guidance Management Corp., is the holder of geothermal renewable energy service contract approved by the Energy Department covering 26,000 hectares in the province of Kalinga. “The parties signed a farm-out agreement which gives Aragorn and Guidance the option to take an equity position of up to 40 percent in the geothermal project. The parties also signed a joint operating agreement," Aragorn said in a disclosure to the Philippine Stock Exchange Friday. Under the agreement, Chevron Kalinga will be responsible for the exploration, development, and operation of the steam field and power plant activities. Aragorn said the project involves the development of steam fields that can generate around 100 MW in new capacity, providing an additional source of clean, indigenous, and reliable baseload power to the Luzon grid. It said a 100-MW geothermal project will cost around $300 million and the project will be the first major international investment into the country under the Renewable Energy Act of 2008. Aragorn and Guidance will conduct exploration activities in the area with a budget of P3.7 million in the first five years. -- JE/OMG, GMANews.TV