Australia’s Geodynamics in Talks to Supply Power to Chevron
iNVEZZ.com, Tuesday, July 23rd: Geodynamics Ltd (ASX:GDY), an Australia-based geothermal explorer, has said that the second-largest US energy company Chevron Corp (NYSE:CVX) and local oil and gas producer Santos Limited (ASX:STO), were interested in becoming customers, Bloomberg has reported today. Chevron entered Australia’s shale industry earlier this year by investing in the Cooper Basin, reportedly one of the best shale gas prospects Down Under. Geodynamics’ share price was unchanged in Australian trading today, whereas Santos’ share price closed less than one percent down. Chevron’s share price was marginally down in pre-market trading in New York.
**Geodynamics in Talks with Chevron, Santos**
Bloomberg quoted Geoff Ward, chief executive officer of Geodynamics, as saying in an interview that discussions with Chevron and Santos had already started. “I’ve spoken to those operators, and they are very positive about acting as initial customers for us,” Ward noted. “They see the interest in this as a long-term supply resource.”
Brisbane-based Geodynamics which is focused on the development of renewable energy generation from hot fractured rocks is trying to become the first company in Australia to operate a commercial geothermal plant. The geothermal energy explorer is planning to start with a 5-megawatt to 10-megawatt project in the Cooper Basin.
Bloomberg quoted Ward as noting that Geodynamics expected to sign a customer in six months to 12 months. The company plans to use data from a 1-megawatt pilot plant which started producing power earlier in 2013, to form a development proposal for the project.
Ward pointed out that the Santos and Chevron ventures were the “key targets” in the company’s search for a customer. “If we can continue to develop it into a material asset play, then it would be a natural fit with their operations in the Cooper.” Adelaide-based Santos became the first company to commercially produce shale gas from the Cooper Basin in 2012.
**Chevron Investing in Australian Gas Assets**
Chevron entered Australia’s shale gas industry in February this year hoping to capitalise on demand from energy-hungry Asian economies which are projected to look to Australia to secure supply. Chevron agreed to acquire interests in two gas blocks in the Cooper Basin from Adelaide-based Beach Energy Ltd and to pay up to $349 million (£231 million) over two stages spanning several years.
At the end of May, Chevron was reported as planning to sell more liquefied natural gas (LNG) from its Gordon project in Australia. Bloomberg quoted Roy Krzywosinski, managing director of Chevron Australia, as saying at the time that the company wanted to have 85 percent of its share of LNG from the Gorgon development in Australia under long-term contracts, compared with the current 65 percent. In addition,
Chevron has been reportedly continuing talks with third-party gas suppliers for a potential expansion of its Wheatstone LNG plant in Western Australia.
!m[Shale Gas Explorer Santos also Interested in Becoming Customer ](/uploads/story/4255/thumbs/pic1_inline.jpeg)
Earlier in July, Melody Meyer, Chevron’s Asia-Pacific head of exploration and production, said in an interview with the Wall Street Journal that Chevron had moved its Asia-Pacific headquarters to Singapore from California to be able to support the execution of the Gorgon and Wheatstone projects Down Under as well as the Chuandongbei project in China.
**Geodynamics’ share price closed unchanged at A$0.13 in Sydney on 23 July 2013. Santos’ share price closed 0.14 percent lower at A$13.86.**
**Chevron’s share price was 0.02 percent down at $127.00 in pre-market trading in New York as of 08:52 EDT.**