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KUTh Energy to develop and supply geothermal power to Saipan

KUTh Energy to develop and supply geothermal power to Saipan

KUTh Energy (ASX: KEN) has been awarded an exclusive concession by the Commonwealth Utilities Corporation of Saipan to develop geothermal power and sell electricity to the transmission grid.

The company has also received a US$1.1 million grant from the Commonwealth of the Northern Marianas Government to support the drilling of a 600 metre deep geothermal gradient well.

KUTh will initially confirm the geothermal gradient and heat flow below Saipan by drilling one or two diamond core holes to about 600 metres deep.

This depth should penetrate the Early Miocene basement below the surface limestone and freshwater aquifers. Positive results will be required from the first drill hole before the second hole is drilled.

Subject to the first well providing positive gradient results then KUTh will submit Stage Two (additional assessment works) to the Commonwealth Utilities Corporation review committee for additional funding support.

Under the contract with the Commonwealth Utilities Corporation, additional grant funding of US$500,000 is also available to support follow-on assessment work if warranted and approved by the Commonwealth Utilities Corporation following the determination of the Stage One Geothermal Gradient Project.

If both drill holes yield encouraging results, KUTh will proceed to a wider geological and Feasibility Study, probably including a magnetotelluric survey, aimed at identifying an Inferred Geothermal Resource.

As part of the concession contract, KUTh will submit its program for exploration and development steps post the Stage One and Stage Two programs.

Previous studies undertaken by the Southern Methodist University and National Renewable Energy Laboratory, both in the United States, have identified potential geothermal targets and rate geothermal as high impact on the Commonwealth of the Northern Marianas Islands’ future power mix if a Resource can be identified.

Current base load diesel generation for Saipan is 30 megawatts and peak load is 45 megawatts, providing compelling economics to replace diesel with geothermal base load power.

Situated north of Guam in the Pacific Ocean, the Commonwealth of the Northern Mariana Islands comprises 14 islands. Saipan, which is the capital, Rota and Tinian are the main islands.

The Saipan Goverment has secured funding from the U.S. Government to support the geothermal exploration Stage One works being undertaken by KUTh.

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