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Construction Contract Agreement for Makushin Geothermal Project

Jan 19, 2023 | Energy, News

Makushin volcano

Makushin Volcano.

Makushin Geothermal Project

Developers of the Makushin Geothermal Project in Unalaska reached agreement for an engineering, procurement, construction (EPC) contract worth $235 million.

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OCCP, the joint venture of Ounalashka Corporation and Chena Power, agreed with Ormat Technologies on terms to advance the 36 MW power plant drawing heat from Makushin Volcano. Ormat Technologies is a Nevada-based company that has built more than 190 power plants around the world, specializing in alternative and geothermal energy sources.

“The Ormat EPC contract is by far the largest and most technically complex part of the overall project,” says OCCP President Bernie Karl. “Having secured a fixed result contract in this important area of the project is indeed an important milestone.”

Karl adds that Ormat received OCCP’s intent to award the contract after an international competition.

Ormat previously explored geothermal leases purchased in 2008 at Mount Spurr, west of Anchorage, but a 4,000-foot well could not find the temperatures required to generate power.

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“We cannot be more pleased to have concluded our contract negotiations and have Ormat as an official team partner and key player,” says Ounalashka Chairman Vince Tutiakoff.

Ormat is recognized globally for developing state-of-the-art, environmentally sound power solutions. Among Ormat’s core competencies are design, manufacture, and supply of geothermal power generating equipment.

The Makushin Geothermal Project would tap heat from a volcano 14 miles west of the City of Unalaska. A power purchase agreement signed in August 2020 with the City of Unalaska guarantees payments for thirty years.

Karl’s Chena Power grew out of his efforts to develop geothermal energy at his Chena Hot Springs resort. His company teamed up with Ounalashka Corporation to form OCCP, giving the village corporation 51 percent of OCCP in exchange for a 7,000-acre land grant.

Karl had hoped to generate first power from Makushin by November 2023, but the announcement of the EPC does not include a target date.

Alaska Business September 2023 cover
In This Issue
Alaska Native Special Section
September 2023
Alaska Native regional, village, and urban corporations are major economic drivers across the state, nation, and in worldwide markets. In this issue we cover many of this sector's recent activities, how leadership is mentoring a new generation, and how these corporations share the wealth with their shareholders, descendents, regions, and villages. Also in this issue we take a moment to explore what's happening in western and northern parts of the state: the AU-Aleutians project, tourism opportunities, retail realities, and more. Enjoy!
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