Magma Vies With Enel to Start Chile's First Geothermal Electricity Plant

Magma Energy Corp. may become Chile’s first producer of geothermal power as it seeks to start output at its Mariposa field in 2014, said John Selters, head of the company’s unit in the South American country.

Magma, based in Vancouver, is at a similar stage of progress as the Apacheta project being developed by a unit of Italy’s Enel SpA and Chile’s state-owned Empresa Nacional del Petroleo, known as Enap, Selters said today.

Magma and Enel are working to harness underground heat to generate electricity in Chile, a proven technology in Iceland and New Zealand, as the country seeks to reduce its dependence on imported coal and natural gas. Chile must develop renewable energy generation as it strives to double capacity in the next decade, President Sebastian Pinera said in a July 15 speech.

Chile has “good attributes” to produce geothermal energy among the volcanoes of the Andes Mountains, Selters said in a telephone interview from Santiago.

Magma will invest about $230 million in the Mariposa project, he said. Most of the capital is needed to import drill rigs and build a plant at the site. The company also operates geothermal power plants in Iceland and Nevada.

The communications department of Apacheta’s operating company didn’t immediately return phone messages seeking comment.

To contact the reporter on this story: Matt Craze in Santiago at mcraze@bloomberg.net

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