Petratherm Managing Director Terry Kallis, says: “Our Geo-Madrid project is now nearing completion of its feasibility assessment, so to align ourselves with one of Europe’s premier energy services providers at this crucial stage of the project bodes extremely well for the future.”

Petratherm’s Geo-Madrid project, which aims to service the heating and cooling needs of a nearby university and a number of large government buildings with geothermal energy, already has three geothermal wells – previously drilled to depths of 3.1-3.5 km.

Petratherm’s exclusivity agreement with Dalkia for the project follows an announcement last month that Petratherm will expand its geothermal exploration activity in Spain after receiving an investigation permit to explore Valles Basin near Barcelona.

“Dalkia has also expressed interest in our exploratory work in the Valles Basin, in addition to other district heating projects currently being pursued by Petratherm throughout the country,” says Kallis.

“We’re on track to become the first company to formally develop geothermal energy projects in Spain, where we have 7 projects covering the spectrum of geothermal energy technologies: district heating, volcanic and conventional electricity, and hot rock.”

The agreement includes a requirement to develop agreed joint venture principles by 31 May 2009. The joint venture arrangements are expected to cover the roles of both parties in the project, their equity participation, and contracts for engineering, procurement, construction (EPC) and operation.

Dalkia is co-owned by water utility Veolia (66%) and Electricite de France (EDF) (34%). The company operates 10 geothermal district heating projects in France’s Paris basin.