Lopez-led Energy Development Corp. (EDC) has postponed its 3-well drilling campaign for the Mariposa Project in Chile.
This, said EDC, was due to the “challenging project economics resulting from the recent fall in prices of competing fossil fuels.”
The drilling campaign, which intends to prove the availability of resources in the area, was originally scheduled mid-October this year.
Earlier, the company said it would invest $85 million or nearly P4 billion to conduct exploratory activities within a geothermal prospect in Chile.
EDC, however, said it continues to pursue development activities with greater focus, including conducting further environmental and technical studies for the steam field, power plant, and transmission line interconnection.
“EDC continues to be committed in developing the Mariposa Project and remains optimistic on the long-term prospects of the Chilean electricity market,” the company said in a statement.
To advance the development of Mariposa, EDC said it would prioritize investing in technical studies for the front-end engineering design (FEED) for the steam field, power plant and for the transmission line connection.
It will also proceed with the Environmental Impact Assessment (EIA) for the project.
“Efforts will likewise be undertaken to identify potential customers and test the pricing levels at which they are willing to enter into long-term power off-take agreements given today’s fossil fuel prices,” said EDC.
EDC is also negotiating with the Inter-American Development Bank (IDB) to secure funding support under the exploration risk mitigation program administered by the bank.
The project, located in the Andes Mountains approximately 300 kilometers (km) south of Chile’s capital city of Santiago, covers two geothermal exploitation concessions, Pellado and Laguna del Maule.
Compañía de Energía Limitada (ENERCO) owns the rights to the project. ENERCO is held by affiliates of EDC, 70 percent; and Canada-based Alterra Power Corp. , 30 percent.
In 2013, EDC signed a joint venture agreement with Alterra Power Corp. for the development of the Mariposa geothermal concession area in Chile.