Copahue Project - Argentina

In May 2010, Earth Heat signed a Heads of Agreement to farmin to the Copahue Geothermal Development Project in Argentina, which comprises of an identified initial 30 MW geothermal development with the potential for significant expansion. Development of Copahue is anticipated to provide first power production and revenue within four years and Earth Heat has the right to earn up to 87.5% of the Project by funding various stages of development

Geography

The Copahue project area is located in the western part of Neuquén province, approximately 300 km from the provincial capital and just a few km from the Chilean border. The geothermal resource on which the project is based occurs on the North-East flank of the Copahue volcanoa young, historically active stratovolcano whose summit is on the international border. It is also situated within a broad caldera that is inferred to have formed by activity that pre-dates that of the Copahue volcano.

The caldera retains its expression as a valley with steep walls on several sides, breached in several places by gaps formed by erosion, which provide access into the Caviahue-Copahue area from more populated areas of Argentina to the east. The principal activities in the area are tourism (including skiing at Caviahue and general recreation) and low-intensity agriculture. One of the zones of thermal manifestations related to the geothermal resource, Termas de Copahue, has been developed for seasonal use as a therapeutic spa.

Work to date

The project area has been the site of geothermal exploration and development activities since the 1970s. This work has included a number of superficial and shallow exploratory surveys (geology, geochemistry, geophysics and temperature gradient drilling).

Four deep wells, reaching depths of as much as 1,414 m have also been drilled in the area. These wells have demonstrated the presence of a commercially exploitable, vapor-dominated geothermal reservoir within at least a part of the project area.

One of the wells (COP-1) was used to supply a pilot power plant, with a capacity of slightly less than one MW for a period of several years. The most recent well (COP-4) was drilled to supply a district heating system at Termas de Copahue; a pipeline was constructed from the well field for this system which is no longer in use. Aside from the spa at Termas de Copahue, there is no exploitation of the Copahue geothermal resource at present.

Resource Characteristics

The Copahue geothermal system occurs within a volcanic terrane formed by several stages of volcanic activity, the ages of which have been inferred to range from Pliocene time (five million years ago or less) to considerably earlier. It is likely, based on the position of the geothermal field and the temperatures observed in wells, that the heat source for the system is related to the same magmatic/volcanic activity that formed the present-day Copahue volcanoheat is most supplied to the system from magma located beneath or close to the centre of the volcanic edifice. The geology of the project area has been studied by several investigators and is discussed in detail (along with other aspects of the geothermal project) in a project feasibility report prepared for the Japan International Cooperation Agency (JICA, 1992).

The most important aspects of the geologic setting are the following:

• Based on surface mapping and evidence from drillholes, the geothermal system occurs mostly or entirely within a thick sequence of volcanic deposits (lavas, pyroclastic rocks,and sediments – including fine-grained lake sediments – derived from the primary volcanic rocks). Older (Mesozoic to Paleozoic-age) rocks similar or identical to those exposed some tens of km to the east may be present at considerable depth,perhaps several thousand meters, but their presence has not been confirmed.
• The location of the geothermal system coincides, at least to a large extent, with a zone of higher ground within the caldera, which has been inferred to reflect a structurally uplifted zone (a horst block or similar structure).
• Major faults, offsetting the volcanic deposits have been inferred to occur along two prominent trends: WNW-ESE (coinciding with the main topographic trend of the elevated area), and NE-SW (appearing as a secondary topographic trend within the elevated area). These two fault trends are evident in satellite imagery and in the topography visible from the ground. In general, the ESE trend predominates to the south of Termas de Copahue (for example, it is evident in the shape of Lago Agrio), whereas the NE trend predominates in the northern part of the area. Faults have also been inferred to occur along other trends; the evidence suggests that, if present, they are less significant than the faults that follow the ESE and NE trends.
• Outside the elevated area (at least in some zones), significant thicknesses of lake sediments, which are likely to be relatively impermeable, have been inferred to be present within the sequence of volcanic deposits that fills the caldera.

The geothermal reservoir therefore occurs mainly or entirely within fractured volcanic rocks in the uplifted area near the western margin of the caldera and the northeastern flank of the Copahue volcano. Structural deformation (probably mainly in the form of faulting) has likely played a role in creating the rock permeability that has allowed the geothermal system to form. However, the evidence from the wells is still too limited to determine whether zones of elevated permeability (sufficient to supply commercially productive wells) are confined to specific fault zones, or distributed more generally through the overall reservoir.

The location, extent, depth, thermodynamic characteristics (temperature and pressure) and chemical characteristics of the geothermal system have been determined or inferred from geochemical and geophysical surveys, and from the various wells that have been drilled in and around the project area. Many aspects of the geothermal system (including, importantly, its total thickness and extent) have not yet been defined completely. However, the following aspects of the system are reasonably well known:

• A high-temperature geothermal reservoir is present in and around the area of 1-2 km2 where the four deep wells have been drilled. These wells all encountered maximum temperatures of at least 235°C and all demonstrated at least some steam production The temperature profiles and other characteristics of these wells do not indicate that any of them are at or close to the boundary of the reservoir, so the reservoir almost certainly extends over a larger area than that encompassed by the wells. Only indirect evidence is available to estimate the overall limits of the reservoir.
• Vapor-dominated conditions appear to exist in at least the part of the reservoir that has been tapped by the four wells. This means that the wells produce dry steam rather than the steam-water mixture produced from most geothermal fields, although a fraction of the water within the reservoir may be present as a liquid phase.
• The reservoir pressure is 35-40 bar-g. This is typical of vapor-dominated geothermal systems (a result of thermodynamic constraints).
• Drilling has shown the reservoir to be at least 600 m thick, extending from about 600-900 m depth below the ground surface to at least 1,200 m. The total thickness of the reservoir is likely to be greater and it has been speculated,but not proven, that a deeper water-dominated reservoir may exist at some depth below 1,400 m.

As noted, the total extent of the geothermal reservoir has not been determined by drilling. However, the following points may be made regarding its possible extent:

• The thermal features of the area (fumaroles and altered ground occurring at the sites known as Termas de Copahue, El Anfiteatro, Las Máquinas and Las Maquinitas) extend over a larger area than that encompassed by the wells (at least 10 km2 vs. 2 km2 or less), indicating that the reservoir likely extends over a corresponding minimum area.
• The evaluation by JICA (1992) identified a low-resistivity anomaly that extends over a triangular area some 13 km2 in extent, including the area of the wells and thermal features. Low-resistivity anomalies of this type are often, although not always, associated with rock alteration at or just above the top of a geothermal reservoir. Therefore, the anomaly provides an indirect indication of the possible extent of the reservoir.
• There is a strong spatial correlation between an identified zone of elevated shallow temperatures (based on measurements made in temperature observation wells drilled for the project), a positive gravity anomaly, the zone of inferred structural uplift, and outlying resistivity anomalies. The coincidence of these features provides some encouragement that the geothermal reservoir might extend over much or all of the area they cover, which is in excess of 30 km2. As a preliminary estimate, this may be considered the maximum or “upside” extent of the geothermal reservoir that might prove commercially exploitable.