Sinopec in geothermal energy JV with Iceland's Geysir Green Energy

Asia's largest crude refiner, China's state-owned Sinopec, has signed a framework agreement to set up a joint venture with Iceland-based Geysir Green Energy to develop geothermal energy across China.

"The geothermal energy development is strategically important for the company as we aim to build the business into one of our main pillars within three years," said Su Shulin, general manager of Sinopec.

Founded in 2007, privately-owned Geysir develops and operates geothermal resources in Iceland, Germany, China and the Philippines.

Geysir said that it shares a common objective to promote further development of the renewable energy sector, and to develop geothermal district heating services on a broader scale in China.

Enex China, a subsidiary of Geysir has already built two geothermal district heating projects in Shaanxi and Hebei province in a 2005 joint venture with Sinopec's subsidiary Star Petroleum Company.

The existing geothermal district heating systems in northwestern China's Xianyang city and Baoding city, owned and operated by the JV, will also be enlarged from their current installed peak-load capacity of 140 MWth that can supply geothermal heating to 3-million square metres, said Geysir.

Sinopec's general manager Su Shulin said that developing geothermal energy is strategically important for the company and it aims to build this business as one of its main pillars within three years.

The framework agreement was signed by Dr. Zhan Qi, president of Sinopec Star at the Icelandic Ministry of Foreign Affairs on behalf Sinopec Star, while Alexander Gudmundsson, CEO of Geysir and chairman of Enex China signed the agreement on behalf of Enex China and Katrin Fridriksdottir, Geysir's chairman on behalf of Geysir.