DATA COLLECTION SURVEY FOR GEOTHERMAL DEVELOPMENT IN THE REPUBLIC OF DJIBOUTI (GEOPHYSICAL SURVEY) FINAL REPORT

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1 The Republic of Djibouti DATA COLLECTION SURVEY FOR GEOTHERMAL DEVELOPMENT IN THE REPUBLIC OF DJIBOUTI (GEOPHYSICAL SURVEY) FINAL REPORT AUGUST 2015 JAPAN INTERNATIONAL COOPERATION AGENCY (JICA) NIPPON KOEI CO., LTD. SUMIKO RESOURCE EXPLORATION AND DEVELOPMENT CO., LTD. JMC GEOTHERMAL ENGINEERING CO., LTD. IL JR

2 The Republic of Djibouti DATA COLLECTION SURVEY FOR GEOTHERMAL DEVELOPMENT IN THE REPUBLIC OF DJIBOUTI (GEOPHYSICAL SURVEY) FINAL REPORT AUGUST 2015 JAPAN INTERNATIONAL COOPERATION AGENCY (JICA) NIPPON KOEI CO., LTD. SUMIKO RESOURCE EXPLORATION AND DEVELOPMENT CO., LTD. JMC GEOTHERMAL ENGINEERING CO., LTD.

3 Eritrea Djibout Red Sea Sakalol Obock Rouweli Ethiopia Lac Asal Nord Goubet Survey Area Hanle Gulf of Tadjoura Djibouti Asal Rift Arta DjiboutiAwrofoul Gaggade Lac Abhe Lac Abhe Sonalia Dikhil Survey Area Hanle Hanle -1 Teweo -1 Hanle-2 Garabbayis-1 Legend Existing Test Well Tracking Record Contour (20 m) Garabbayis-2 Dug Well Fumarole Rock Gas Sampling Point Acidic Altered Rock Weaky Acidic /Propyritic altered Survey Area

4 Abbreviations ASTER CERD DEM EDD ESIA EIS GENZL GRMF ICEIDA IPP ISOR JICA a.s.l MT NCG ODDEG ORSTOM PPP R gas TD TEM TOR TVD USAID WB Advanced Spaceborne Thermal Emission and Reflection Radiometer Centre de Recherche et des Etudes de Djibouti (Centre for the Study and Research of Djibouti) Digital Elevation Model Electricite de Djibouti Environmental and Social Impact Assessment Environmental Impact Statement Geothermal Energy New Zealand Ltd. Geothermal Risk Mitigation Facility Iceland International Development Agency Independent Power Producer Iceland Geosurvey Japan International Cooperation Agency Above Sea Level Magneto-Telluric Non-condensable Gas Djiboutian Office for Development of Geothermal Energy Office de la Recherche Scientifique et Technique Outre-Mer Public-Private Partnership Residual Gas Total Depth Transit Electro-magnetic Terms of Reference True Vertical Depth United States Agency for International Development The World Bank

5 Data collection Survey for Geothermal Development in Djibouti 1. Background of the Project 1.1 Background (Geophysical Survey) Executive Summary Geothermal development has been conducted since 1970 in the Republic of Djibouti. However, geothermal energy has not been smoothly developed partially because high salinity geothermal fluid was encountered. Under such circumstance, the President of Djibouti requested the Prime Minister of Japan when he visited Djibouti in August 2013 for possible technical assistance on geothermal energy development. In response to this request, the Government of Japan expressed its intention to provide support. In accordance with this, the Japan International Cooperation Agency (JICA) carried out the Data Collection Survey on Geothermal Development (hereunder referred to as JICA Survey (2014) ) in 2014 to collect and analyze geological and geochemical information of all existing and conceived geothermal manifestation sites. As a result, development priority was proposed. 1.2 Purposes The purposes of the survey are as follows: - To evaluate the geothermal resource of Hanle for consideration of possible future detailed surveys, i.e., test drilling; and 2. Review of Existing Surveys 2.1 Collected Data The surface surveys (geological/geochemical/geophysical survey) and test well drilling had been carried out in Hanle Region. Based on the survey results, Aquater (1989) and Jalludin (2009) described the presence of geothermal system in the Hanle Plain is contradicted. However, the presence of fumaroles on the plateau side suggests the possibility of the existence of geothermal system. Based on the existing survey results described above, the following are assumed for the geothermal system of the Hanle Region. 1. The results of temperature distribution of the test wells indicated that a heat source causes the fumaroles at the surface, which is believed to suggest the presence of heat source in the plateau side. This is consistent with the fact that fumaroles are observed on the plateau. 2. The reason of low temperature of wells that have been drilled in the Hanle Plain is inferred to be Japan International Cooperation Agency S - 1 Sumiko Resource Exploration and Development Co., Ltd.

6 due to the presence of groundwater flow in the Hanle Plain. In addition, hydraulic gradient indicates the possibility that the source of groundwater is in the Hanle Plain side. 3. In the geochemical survey under the JICA Survey (2014), the possibility of a temperature of about 250 ºC on the reservoir has been pointed out. From the above, the presence of geothermal system may exist under the plateau that extends to the northeast of the Hanle Plains. Therefore, the Magneto-Telluric (MT) and Transit Electro-magnetic (TEM) surveys were performed on the plateau, in order to reveal this assumption. 3. Geophysical Survey 3.1 Objectives In one of the target fields for geothermal development in the project, the Magneto-Telluric (MT) survey, which is one of the electromagnetic survey methods, was conducted to study the subsurface resistivity structure. The Transit Electro-magnetic (TEM) survey was carried out to have static correction of MT data. The acquired data were processed and analyzed to clarify the underground resistivity structures of the target field. The geology and geological structures were deduced from the subsurface resistivity distribution and the geophysical information of deep zone to contribute to the creation and estimation of geothermal reservoir model and the planning of test drilling survey was obtained. 3.2 Results of 2D Inversion The following are the characteristics of the resistivity structure in Hanle Geothermal Field. And the panel diagrams of resistivity cross section and plan map are shown in Figures 3-14 and 3-15, respectively: The resistivity structure consists of three zones, namely: conductive overburden, resistive intermediate thick zone, and conductive deeper zone at a depth from the surface to -10,000 m elevation. The resistivity distribution is roughly ranging from 1 ohm-m to 2,500 ohm-m. The contour line, as the boundary of 100 ohm-m resistivity between conductive overburden and resistive intermediate zones, is located from -1,500 m to -2,000 m elevation at the southwest side of the survey site, and its location becomes shallow to the northeast direction and is roughly ranging from -500 m to -1,000 m elevation at the northeast side of the survey site. In a large sense, resistivity distribution may change from conductive to resistive from the southwest side to the northeast side. From -1,000 m to -2,000 m elevation, the interval of contour lines is relatively narrow. It suggests the resistivity discontinuity which shows drastic change of resistivity value. The conductive overburden is thin in the graben part of the survey site and thick in the horst part while the intermediate resistive zone shows a large value in the horst part and a small value in the Japan International Cooperation Agency S - 2 Sumiko Resource Exploration and Development Co., Ltd.

7 graben part of the survey site. The location of resistivity discontinuity, which shows drastic change of resistivity, mainly coincides with the boundary between the graben and the horst. In all the profiles, the highest resistivity (>2,500 ohm-m) is observed from -4,000 m to -5,000 m elevation and this high resistivity is distributed widely with a central focus on HNL200 and HNL300 profiles. 標高 100m 標高 -500m 標高 -1000m 標高 -2000m 標高 -4000m 標高 m Source: The Survey Team Figure1 4 Supplementary Surveys Panel Diagram of Resistivity Maps 4.1 Overview of Geology and Topography the geological and topographic feature of the survey area is as follows. Quaternary volcanic rocks (Afar Stratoid) are widely distributed in the survey area. Major geological layers are the lower basalt layer ( Ma), upper basalt layer ( Ma), and uppermost basalt layer (1.25 is a Ma). Rhyolite layer ( Ma), which is almost the same age as the lower basalt layer, is developed in the north. Basalts form a plateau, covering a wide range including the MT/TEM survey area. In addition, the uppermost basalt layer develops as volcanic corns in the NW-SE direction on the plateau. 4.2 Site Survey and Laboratory Analysis In order to confirm the distribution of geothermal manifestations in the survey area, geological reconnaissance was conducted in parallel with the geophysical surveys. As a result, the fumarole area has been confirmed in the three sites around the geophysical survey area. Japan International Cooperation Agency S - 3 Sumiko Resource Exploration and Development Co., Ltd.

8 The survey conducted this year is an additional survey, to study more precisely the area and chemical change of the geothermal steam supplied. For this purpose, two fumaroles including the one surveyed last year were examined. As a result, geothermal steam producing the geothermal manifestations can be steadily supplied from a geothermal reservoir which has the highest temperature of 260 C. Based on this interpretation, it follows that Garabbayis is an appropriate location for new test drilling to prove the presence of a geothermal reservoir. 5 Geothermal Reservoir Model and Target for Geothermal Test Wells 5.1 Preliminary Geothermal Reservoir Model The observations/information and interpretations necessary for the construction of preliminary geothermal reservoir model are summarized in Table1, based on the past survey results and the geophysical survey conducted. Table1 Summary of Observations and Interpretations Observation Geothermal System Interpretation Temperature at 500 m depth of the past 5 test wells increases from the plain side to the plateau side (40 ºC 90 ºC 120 ºC) Heat source Fumaroles are observed only in the plateau area. The confirmed fumaroles seem to be on the extension line of the major faults. Reservoir The heat source may exist under the plateau area. Fumaroles may emerge along the faults in rhyolite and/or lower basalt layer. The confirmed fumaroles exist on the margin of the upper basalt. The fumarole includes mantle origin gas, and the geothermometer indicates 260 ºC Groundwater level in the Hanle Plain is higher than that in the plateau area. There is a distinct difference of resistivity structure between the plain side and the plateau side. Ultra high resistivity zone (1,000 Ωm or more) is identified below elevation -3,000 m in the plateau side. Reservoir Fluid Fluid recharge Regional geological structure Heat source The upper basalt may act as the cap rock of the reservoir. Fluid with high temperature may exist. There may be recharging from the plain side to the plateau side. There may be major fault between the plain and the plateau. This may be an intrusion body that retains high temperature. Source: The Survey Team Based on the above information and interpretation, the following three cases are proposed as the preliminary geothermal reservoir model. Japan International Cooperation Agency S - 4 Sumiko Resource Exploration and Development Co., Ltd.

9 Reservoir Fluid Table2 Preliminary Reservoir Conceptual Models Case (a) Figure 2 Case (b) Figure 3 Case (c) Figure 4 State of reservoir Not passed much time from Geothermal system is fully Heat supply from the heat the heat source intrusion developed source is attenuated, and High temperature reservoir is Geothermal fluid circulates, reservoir temperature present locally and reservoir is formed over a wide range decreases Area/zone Under the plateau Along faults Along major faults only where fumaroles are confirmed Permeability (hosted rock) High Low Low Temperature Origin Originated from the Hanle Originated from the Hanle Originated from the Hanle Plain Plains Plain Upflow Along fractured faults Along fractured faults Along the major fault only Heat source An intrusive rock below 3 km Source: The Survey Team SW NE Source: The Survey Team Figure 2 Geothermal Conceptual Model: Case (a) SW NE Source: The Survey Team Figure 3 Geothermal Conceptual Model: Case (b) Japan International Cooperation Agency S - 5 Sumiko Resource Exploration and Development Co., Ltd.

10 SW NE Source: The Survey Team Figure 4 Geothermal Conceptual Model: Case (c) A preliminary reservoir assessment with information on the target area based on the survey shows the following results: Capacity (MW) 80% Most Probable 20% Target for Geothermal Test Wells (1) Target Position on the Map In that zone, the locations of the most active manifestations can be a candidate for the target position on the map, as shown by a red circle in Figure 5. Figure 0 (2) Target Depth Source: The Survey Team Map for Planning of a New Test Well Drilling in Garabbayis Target depth should correspond to the depth of a high temperature in the models. The altitude of the Japan International Cooperation Agency S - 6 Sumiko Resource Exploration and Development Co., Ltd.

11 isotherm of 250 C is set at around -1,200 masl in the models; thus, the target depth should be at least 1,500 m from the surface whose altitude is ca. 300 masl. Considering more the uncertainty of the isotherm in the models, the target depth should be set at the depth ranging from 1,500 m to 1,800 m (-1,500 masl) as shown in Figure 6. Fault-1 Source: The Survey Team Figure 6 Target Depth in the Geothermal Reservoir Model (3) Wellhead Location The well pad of the Garabbayis-1 well can be used for a new test well. The well pad is made of concrete, offering a rigid and flat base for the drilling rig. (4) Preliminary Drilling Plan On the basis of the location of targets, preliminary drilling plan was examined. In the case where the well pad for Garabbayis-1 is used also for the new test well, the deviation should be 300 m to reach the farthest target. This deviation and targeted TVD (1,800 m) require a TD of 2,000 m with an inclination of the well less than 30. This plan is sufficiently acceptable with a normal 2,000 m class drilling rig. 6. Preliminary Economic Analysis for IPP Participation With information available at this stage, the reservoir resource of the Hanle geothermal prospect was evaluated at 15 MWe as the probable occurrence 80% that should be considered when IPP project is to be planned. This capacity is as a similar size as of a small hydropower plant. However, the Hanle Japan International Cooperation Agency S - 7 Sumiko Resource Exploration and Development Co., Ltd.

12 geothermal power station will be economically superior to the existing oil thermal power plants if the transmission line should be constructed without financial burden to EDD. Presently, a significant part of the electricity is being purchased from Ethiopia. Although Ethiopia still has a large capacity of hydropower energy, the power purchase agreement between the two countries have entered into only for a period of Ethiopia wet seasons. On the other hand, power plants within Djiboutian territory are all of oil thermal power plant. Therefore, Djibouti does not actually have any power plants of indigenous energy source. Under this circumstance, constructing the Hanle geothermal power station, though the capacity is 15 MWe together with transmission line will be justifiable not only from economical point of view but also energy security point of view too. 7. Procedure of Environmental and Social Considerations 7.1 Environmental and Social Impact Assessment Study Decree /PR/MHUEAT (2011) shall be referred to for the Environmental Social Impact Assessment (ESIA), which describes the procedures to be followed. The decree classifies the assessment into two categories: (1) basic and (2) detailed. The detailed assessment is required for test well drilling and plan construction. Assessment of the terms of reference (TOR) by the competent office needs about one month at least, Survey and report preparation may take two months, Assessment and approval of the report needs about three months, and A total of about six months are required to start the test well drillings. 8. Proposal of Additional Surface Survey 8.1 Issues to be Solved to Realize Test Well Exploration The following are the issues to be solved before implementation of test well exploration: To verify the appropriateness of the interpretation of geological structure (geological characteristics of the Hanle Plain and the plateau). A number of faults have been objectively confirmed by the lineament analysis using DEM data. The MT/TEM survey identified one major fault between the Hanle Plain and the plateau. Distribution of fracture together with regional geological structure has to be clarified. To improve knowledge on the characteristics of reservoirs The resistivity structure of Hanle is different from that of a typical geothermal reservoir. Even though, the Survey Team proposed three reservoir models based on the fact that there are geothermal manifestations. The appropriateness of these models, however, has to be verified with additional surface survey before test well exploration because the information at hand is considered not to be enough to confidently propose the reservoir model which could allow more Japan International Cooperation Agency S - 8 Sumiko Resource Exploration and Development Co., Ltd.

13 reliable resource estimation. The drilling target may also be refined with the additional information. To understand the extent of the sheeted high resistivity zone below, and the very low resistivity zone in the surface zone of the northeast side of the plateau The high resistivity zone below is considered to be the heat source that would originate from intrusive rock; and the low resistivity zone in the surface zone of the northeast side of the plateau may form the cap structure of the reservoir. These resistivity structures extend beyond the present MT/TEM survey area. Since these are considered to be very important to examine the geothermal system, the survey area has to be widened. This is also important to review the size of the reservoirs. 8.2 Proposal for Additional Survey The following three surface surveys are proposed: (1) gravity survey, (2) additional MT/TEM survey, and (3) micro-seismicity monitoring. In addition, the following surveys are proposed which are necessary for smooth implementation of test well exploration in the shortest time period: (4) ESIA for test well drilling and (5) preparatory survey for test well drilling works. 8.3 Preliminary Work Schedule Up to Test Well Drilling A preliminary work schedule up to test well drilling is proposed in Figure 7 below. Work Item 1. Gravity Survey Preparation Observation 300 points Analysis/Reporting 2. Microseismic Survey Preparation Installation 5 points Observation 3 months Analysis/Reporting 3. Additional MT/Tem Survey Preparation Observation 36 points Analysis/Reporting 4. Comprehensive Analysis 5. ESIA Scoping TOR Review Site Survey Review 6. Preliminary Study for Test Drilling Market Research Civil Engineering Planning Specification Cost Estimation 9. Activities of Other Donors 9.1 USAid 1st 2nd 3rd 4th 5th 6th Source: The Survey Team Figure 7 Preliminary Work Schedule up to Test Well Drilling - A workshop was conducted on independent power producers (IPP) and public private partnership (PPP) for the energy sector in October An expert was appointed in 2014 to promote IPP or PPP projects in the energy sector. It is 7th Japan International Cooperation Agency S - 9 Sumiko Resource Exploration and Development Co., Ltd.

14 understood that an aim of this support is to build a consensus for implementation of Power Africa under the Obama Initiative. The expert had left the country in February An alternative expert has been selected. The expert is not stationed in Djibouti and visits the country intermittently to conduct information collection and exchange. It is explained that the subject appears to be centered on the Asal Project in connection with investment opportunities from the country, and that specific proposals on institutional matters seem not to be made by the expert Support to Asal Geothermal Project by WB and Other Donors - The Assal Geothermal Project is being handled by the EDD. The ODDEG and CERD serve like a technical support. Much information therefore is not available. - Information given by ODDEG that needs to be confirmed are as follows: The project director has been selected as of July Procurement of drilling contractor is ongoing. The project seems to be moving. However, every procedure has to go through the seven donors one by one, which will take a longer process. Information on the actual implementation of drilling is yet to be made available to the Survey Team 9.3 Support from ICEIDA The support from the Icelandic International Development Agency (ICEIDA) is categorized in the following four sections according to the information given by ODDEG: - Improved project management capacity for geothermal projects and project management system is in place at ODDEG (from May 2015) - Geothermal drill training (2016) - Improved capacity for surface exploration - Lac Abhe (from October 2015) - Technical assistance (finalization of Geothermal Risk Mitigation Facility (GRMF) application and other matters, as applicable) ICEIDA supported ODDEG in the preparation of the application to GRMF for the surface survey in Nord Goubet. Although the expression of interest (EoI) was accepted, the preparation of the full application was suspended. 9.4 GRMF The ODDEG submitted the full application to GRMF for the surface survey of Arta geothermal prospect with the assistance of a Japanese consultant group. The result will be notified by GRMF by January If the application is accepted, the surface survey will be conducted by the staff of ODDEG with the technical advice of the Japanese consultant group. 10. Activities with the National Fund The Government of Djibouti is now in the process of procuring a drilling rig from Turkey. The present conditions are as follows: - Contract negotiation for purchasing a drilling rig with 2,000 m capacity. The machine would be Japan International Cooperation Agency S - 10 Sumiko Resource Exploration and Development Co., Ltd.

15 made available in Djibouti in A second-hand drilling rig with 900 m capacity will be provided from Turkish company, and will be made available in Djibouti in the coming September The ODDEG intends to conduct training of their staff with this machine. - Information is yet to be made available to the Survey Team on how these rigs are to be operated when the Asal Project or other projects are to be implemented. 11. Conclusions and Recommendations 11.1 Conclusions Geothermal Resource Assessment (1) The Hanle Plain has a main fault in its northwest plateau. (2) The heat source and geothermal reservoir exist underneath the northwest plateau. (3) The resistivity structures obtained by the geophysical survey do not show a similar pattern to the typical geothermal resistivity structure of a geothermal reservoir. This is the reason why it is considered that the hydrothermal alteration is not yet well advanced in Hanle. (4) However, the Survey Team considers the geothermal system, which represents that manifestations in field should consist of the heat source, reservoir, and fluid. Heat source should be a body that shows high resistivity and is considered to be an intrusion body. Reservoir should be fractured faults themselves or together with permeable layers in the lower basalt, with capping structure made up of upper basalt. The reservoir could be 260 C according to the geochemical survey that the Survey Team conducted. Geothermal fluid should be recharged from the Hanle Plain where groundwater level is higher than in the plateau. (5) A preliminary reservoir assessment with information on the target area based on the survey shows the following results: Capacity (MW) 80% Most Probable 20% However, there will be issues that need to be clarified as described in Section 11.2 below, and this preliminary estimation shall be reviewed through the clarification of these issues. Environmental and Social Impact Assessment (ESIA) An ESIA is required by the Government of Djibouti before implementation of test well drillings as well as before construction of geothermal plant. The process from the application with TOR to the approval of ESIA for drilling works will need at least six months. To facilitate the implementation of the works, the Survey Team has prepared the proposed TOR based on the one for the geothermal development project in Asal, which is now in the process of project implementation. Japan International Cooperation Agency S - 11 Sumiko Resource Exploration and Development Co., Ltd.

16 Preliminary Economic Analysis Assuming IPP Project The ODDEG intends to invite an IPP to the Hanle geothermal prospect after the geothermal resources are confirmed by test wells, in principle. The Survey Team conducted a preliminary economic assessment of a 15 MW geothermal power plant operated by an IPP which resulted in a breakeven tariff of US$12.96/kWh for the power plant as against the estimated levelized cost of electricity (LCOE) of US$19.0/kWh of a diesel power plant as an alternative case. Although the breakeven tariff is higher than the energy price imported from the Ethiopia Hydropower System, the Survey Team considered that the estimated breakeven price of the 15 MW geothermal power project would be attractive for EDD taking into account energy security. Thus, an IPP project in Hanle would be a promising option Issues and Recommendations Reservoir Estimation and Decision for Test Well Drilling Issues: The next step after the geophysical survey would be the test well drilling based on a standard project sequence. However, the resistivity structure of the Hanle Reservoir has been revealed to be different from the typical resistivity structure. On the other hand, the Survey Team considered the need to have a geothermal reservoir because clear and strong geothermal manifestations are observed on site. The Survey Team considers it prudent and necessary to conduct the additional 3-G survey which will contribute to the clarity of the geothermal system. With these information, a decision of Go or No-go for test well drilling could be made. Recommendations: The following additional surveys have been proposed in this report: Gravity survey for consideration of geological structure in connection with geothermal reservoir system, Additional MT/TEM survey for identification of the possible extent of geothermal reservoir, 3D inversion analysis for MT/TEM data, and Micro-seismicity monitoring for identification of geothermal fluid movement. Environmental and Social Impact Assessment ESIA Issues An ESIA process for test well drilling will need at least six months, which may retard the process of a speedy development. Recommendations: It is recommended to conduct such process together with the proposed additional 3-G survey in order Japan International Cooperation Agency S - 12 Sumiko Resource Exploration and Development Co., Ltd.

17 to implement the test well drilling immediately after the additional 3-G survey. Survey on Procurement for Drilling Works Issues Djibouti has experiences in conducting test well in the 1980s. but since then, the activities were suspended. There is actually few information regarding availability of drilling machines, drilling contractors, and modes of contract together with cost information. Recommendations: It is therefore necessary to conduct a survey on procurement matters for the drilling works. Preliminary Economic Analysis for an IPP Project Issues The ODDEG intends to invite an IPP for the Hanle geothermal prospect after the confirmation of geothermal resources. This report conducted a preliminary economic analysis focusing on IPP project through desk study with available information at hand. The results of this analysis should be refined with the information on economic factors as well as the results or reassessment of geothermal resource with additional information to be obtained from the additional 3-G survey. Recommendations: It is recommended to conduct a preliminary economic assessment assuming an IPP project that the ODDEG intends to introduce. *** end of report ** Japan International Cooperation Agency S - 13 Sumiko Resource Exploration and Development Co., Ltd.

18 DATA COLLECTION SURVEY FOR GEOTHERMAL DEVELOPMENT IN DJIBOUTI (GEOPHYSICAL SURVEY) FINAL REPORT Table of Content Location Map Abbreviations Summary Chapter 1 Background of the Project Background Purpose and Scope Purposes Survey Areas Scope Chapter 2 Review of Existing Surveys Collected Data Surface Survey Geological and Geochemical Survey Drilling Data of Existing Wells Overview Geological Structure Alteration Minerals Distribution of Permeability Wellbore Temperature Summary of Existing Surveys Conclusion of Existing Survey Interpretation of the Survey Team Japan International Cooperation Agency i

19 Chapter 3 Geophysical Survey Objectives Survey Results Outline of Survey Results of Survey Results of 2D Inversion Conclusions of 2D Inversion Chapter 4 Supplementary Surveys Overview of Geology and Topography Geological Structure Fault Distribution Site Survey and Laboratory Analysis Surface Manifestation Geochemical Survey Chapter 5 Geothermal Reservoir Model and Target for Geothermal Test Wells Construction of Conceptual Model Geothermal Reservoir and Resistivity Structure Resistivity Structure of Hanle Site Preliminary Geothermal Reservoir Model Preliminary Evaluation of Geothermal Potential Target for Geothermal Test Wells Chapter 6 Preliminary Economic Analysis for IPP Participation Assumptions IPP Breakeven Power Sales Prices at the Power Station Transmission Cost Power Purchasing Cost at Ali Sabieh Substation A comparison with the power generation cost at the existing power plants Conclusions Chapter 7 Procedure of Environmental and Social Considerations Environmental and Social Impact Assessment Study Review of Existing Surveys(ESIA for Asal Geothermal Project) Draft Terms of Reference Chapter 8 Proposal for Additional Surface Survey Issues to be Solved to Realize Test Well Exploration Japan International Cooperation Agency ii

20 8.2 Proposal for Additional Survey Preliminary Work Schedule up to Test Well Drilling Chapter 9 Activities of Other Donors United States Agency for International Aid (USAID) Support to Asal Geothermal Project by the World Bank (WB) and Other Donors Support from ICEIDA Geothermal Risk Mitigation Facility (GRMF) Chapter 10 Activities with National Fund Procurement of Drilling Machines Construction of the New ODDEG Office at PK Chapter 11 Conclusions and Recommendations Conclusions Issues and Recommendations Figures and Tables Table 1-1 Proposed Development Priority in JICA Survey (2014) Table 2-1 Existing Information Table 2-2 Data of Existing Wells Table 2-3 List of Aquifer Depth Table 4-1 List of Geothermal Manifestation Table 4-2 Results of the Chemical Analysis for Fumarolic Gas in Garabbayis Table 5-1 Relation between Resistivity and Alteration Minerals and Temperature Table 5-3 Summary of Observations and Interpretations Table 5-4 Preliminary Reservoir Conceptual Models Table 5-5 Parameters for the Volumetric Method Table 5-6 Preliminary Resource Assessment Table 6.1 Assumptions for Examination of IPP Breakeven Power Price Table 6.2 IPP Breakeven Power Sales Prices Sold-out at the Hanle Geothermal Power Station Table 6.3 Assumptions for Transmission Cost Calculation Table 6.4 Power Purchasing Cost at the Ali Sabieh Substation Japan International Cooperation Agency iii

21 Figure 1-1 Geothermal Development Stages Figure 2-1 Fluid Circulation in the Hanle Plains based on Geochemical Analysis Figure 2-2 Fluid Flow System of Fumaroles Figure 2-3 Location Map of Electrical Survey in Hanle Plains Figure 2-4 Results of Electrical Survey and Interpretation Figure 2-5 Location Map of the Existing Wells Figure 2-6 Distribution Chart of Altered Minerals Figure 2-7 Contour Map of Underground Temperature(- 500 m a.s.l) Figure 2-8 Temperature Profiles in the Existing Wells Figure 3-1 Location Map of MT Survey Site Figure 3-2 Location Map of MT Stations Figure 3-3 Resistivity Cross Section (HNL100) Figure 3-4 Resistivity Cross Section (HNL200) Figure 3-5 Resistivity Cross Section (HNL300) Figure 3-6 Resistivity Cross Section (HNL400) Figure 3-7 Resistivity Cross Section (HNL500) Figure 3-8 Resistivity Plan Map (-100 m elevation) Figure 3-9 Resistivity Plan Map (-500 m elevation) Figure 3-10 Resistivity Plan Map (-1,000 m elevation) Figure 3-11 Resistivity Plan Map (-2,000 m elevation) Figure 3-12 Resistivity Plan Map (-4,000 m elevation) Figure 3-13 Resistivity Plan Map (-10,000 m elevation) Figure 3-14 Panel Diagram of Resistivity Plan Maps Figure 3-15 Panel Diagram of Resistivity Plan Maps Figure 4-1 Geological Map of the Survey Area Figure 4-2 Inclination Distribution Map and Inclination Direction Map Figure 4-3 Fault Distribution Map Figure 4-5 Location Map of Geothermal Manifestation Figure 4-6 Distribution Map of Geothermal Manifestation Figure 4-7 Geochemical Survey Area Figure 4-8 Photographs of Geothermal Manifestations in Garabbayis Japan International Cooperation Agency iv

22 Figure 4-9 He-Ar-N 2 Ternary Diagram for Garabbayis Fumarolic Gases Figure 5-1 Geothermal Reservoir and Resistivity Structure Figure 5-2 Resistivity and Alteration Mineral Figure 5-3 Geothermal Conceptual Model: Case (a) Figure 5-4 Geothermal Conceptual Model: Case (b) Figure 5-5 Geothermal Conceptual Model: Case (c) Figure 5-6 Map for Planning of a New Test Well Drilling in Garabbayis Figure 5-7 Target Depth in the Geothermal Reservoir Model Figure 7-1 ESIA Procedures Appendices Appendix -1 Appendix -2 Appendix -3 Appendix -4 List of Collected Documents Record Photographs Data of Existing Wells Geophysical Survey Japan International Cooperation Agency v

23 Chapter 1 Background of the Project 1.1 Background Geothermal development has been conducted since 1970 in the Republic of Djibouti. However, geothermal energy has not been smoothly developed partially because high salinity geothermal fluid was encountered. Under such circumstance, the President of Djibouti requested the Prime Minister of Japan when he visited Djibouti in August 2013 for possible technical assistance on geothermal energy development. In response to this request, the Government of Japan expressed its intention to provide support. In accordance with this, the Japan International Cooperation Agency (JICA) carried out the Data Collection Survey on Geothermal Development (hereunder referred to as JICA Survey (2014) ) in 2014 to collect and analyze geological and geochemical information of all existing and conceived geothermal manifestation sites. As a result, development priority was proposed as shown in Table 1-1. Site Name Hanle Arta Nord Goubet Gaggade Obock Djibouti- Awrofoul Table 1-1 Proposed Development Priority in JICA Survey (2014) Geothermal Resources Workability Socio-Environmen (Reference) Well Distance Re- CL Accessi- Natural Inha- Priority DjiboutianPriority Landform Drilling to sources (mg/l) bility Conditionsbitant Water ransmissio A A A A B C A ±1,000 D >30,000 D >30,000 B <5,000 C 10,000~ 20,000 A ±1,000 C B C-D A:Excellent, B:Good, C:Fair, D:Poor D A A B Plainragged hill B Plainragged hill C Plainragged hill A Groundwater In Hanle Plain C Sea C Sea A Barren A Barren A Barren A D A Groundwater Ragged hill barren In Hanle Plain A Plain A Plain C Sea C Sea B Coastal A None B A few B A few A None D Near Town 45 km to Dikhil 6 km to N.1 50 km to P.K km to P.K 51 Survey for the Next Stage 2 1 MT Survey Isolated MT Survey Others MT Survey Application pending for GRMF Review of Application CERD s pending MT Survey for GRMF Review of CERD s MT Survey MT Survey Source: The Survey Team There are seven stages in geothermal development in general. Among these seven, the JICA Survey (2014) corresponds to the Surface Survey Stage (Figure 1.1). In order to proceed to the Test Drilling stage, it is necessary to select/identify drilling targets by detailed surface surveys (geophysical survey followed by construction of geothermal conceptual model). Under this circumstance, the JICA Survey (2014) (geophysical survey) has thus been instigated by JICA. Japan International Cooperation Agency 1-1

24 Geological, Geochemical and Geophysical Surveys Next Survey Source: The Survey Team 1.2 Purpose and Scope Purposes The purposes of the survey are as follows: Figure 1-1 Geothermal Development Stages - To evaluate the geothermal resource of Hanle for consideration of possible future detailed surveys, i.e., test drilling; and - To assess the requirement for environmental assessment for drilling and future plant construction Survey Areas Hanle Garabbayis, Republic of Djibouti The survey location is shown after the cover page Scope The scope of work of the survey is as follows: 1 To implement geophysical survey, 2 To evaluate the geothermal resource through construction of a conceptual geothermal model of Hanle s geothermal prospect, 3 To assess the necessity of test well drilling, and 4 To select drilling targets. Japan International Cooperation Agency 1-2

25 Chapter 2 Review of Existing Surveys 2.1 Collected Data The existing surveys that had been carried out in Hanle Region are shown in Table 2-1. Table 2-1 Existing Information No Name Author Year Geology 1 PROJET POUR L EVALUATION DES RESSOURCES GEOTHERMIQUES Aquater 1981 Geochemistry Geophysics Drilling 2 RESSOURCES GEOTHERMIQUES ETUDES EFFECTUEES PAR AQUATER INTERPRETATION OF GRADIENT WELLS DATA HANLE PLAIN 4 GEOTHERMAL EXPLORATION PROJECT HANLE-GAGGADE REPUBLIC OF DJIBOUTI HANLE 1 REPORT 5 GEOTHERMAL EXPLORATION PROJECT HANLE-GAGGADE REPUBLIC OF DJIBOUTI HANLE 2 REPORT 6 CARTE GEOLOGIQUE DE LA REPUBLIQUE DE DJIBOUTI A 1: DIKHIL 7 DJIBOUTI GEOTHERMAL EXPLORATION PROJECT REPUBLIC OF DJIBOUTI DRAFT FINAL REPORT 8 DATA COLLECTION SURVEY ON GEOTHERMAL DEVELOPMENT IN THE REPUBLIC OF DJIBOUTI Aquater 1982 Geotermica 1985 Aquater 1987 a Aquater 1987 b ORSTOM 1987 Aquater 1989 JICA 2014 Source: The Survey Team 2.2 Surface Survey Geological and Geochemical Survey Based on Aquater (1981), geological and geochemical survey was carried out in the Hanle Plains. About 22 rock samples were collected, observed, and analyzed. In the geochemical survey, hot spring water, spring water, and fumarolic gas were collected and analyzed. As a result, it indicated the presence of three aquifers, namely: sedimentary rock (chlorinated alkaline water), alluvial aquifer (bicarbonate-alkaline earth water), and volcanic aquifer (bicarbonate-alkaline sulphate chlorinated water) (Figure 2-1). Also, the upflow of fluid containing CO 2 from deep underground was suggested. The model shown in Figure 2-2 was proposed for the source of fumarole. Japan International Cooperation Agency 2-1

26 Source: Modified from Aquater (1981) Figure 2-1 Fluid Circulation in the Hanle Plains based on Geochemical Analysis Figure 2-2 Fluid Flow System of Fumaroles Source: Modified from Aquater (1982) Japan International Cooperation Agency 2-2

27 In Hanle Region, electrical survey was carried out in the entire Hanle Plains by Aquater (1982). The survey point arrangement is shown in Figure 2-3; the fumarole points that have been confirmed by the JICA Survey (2014) are located at the southeast end of the survey area. The analysis result of the resistivity cross section (NE-SW direction) is shown in Figure 2-4. Low resistivity layer in the shallow part (a few Ωm) and high resistivity layer in the deep part (tens Ωm) are confirmed, and it was concluded that each of these parts corresponds to sedimentary/alluvium layer and volcanic rock layer, respectively. Discontinuity of resistivity structure was confirmed in the center of the Hanle Plains, which suggests fault structure. The exploration well drilling was proposed to aim at these faults. Survey Area Cross-section of Figure 2-4 Source: Modified from Aquater (1982) Figure 2-3 Location Map of Electrical Survey in Hanle Plains Japan International Cooperation Agency 2-3

28 Alluvium Volcanic Rock Geological Interpretation Source: Modified from Aquater (1982) Figure 2-4 Results of Electrical Survey and Interpretation 2.3 Drilling Data of Existing Wells Overview In Hanle Region, five wells were drilled in the 1980s. These wells were drilled on the plain area according to the results of surface survey described in the previous section (Figure 2-5). Table 2-2 shows the main data of existing wells. Garabbayis-1, Garabbayis-2, and Teweo-1 are structural drilling wells about 450 m deep to assess the underground temperature. The results of these exploration wells were presented in Aquater (1982) and Geotermica (1985). Deep exploration wells Hanle-1 (drilling depth of 1,623.8 m) and Hanle-2 (drilling depth of 2,038 m) were carried out to reflect the results of the structural drilling wells. These results were reported in Aquater (1987 a, b; 1989). Japan International Cooperation Agency 2-4

29 Item Coordinate Depth Drilling Period Table 2-2 Data of Existing Wells Well Name Garabbayis-1 Garabbayis-2 Teweo-1 Hanle-1 Hanle-2 N11º E42º Elevation : 299m N11º E42º Elevation : 245m N11º E42º Elevation :142m N11º E42º Elevation :210m N11º E42º Elevation: 236.8m 437m m 452 m m 2038 m 1982 (Period is unknown) 1984/11/9 1984/11/28 (20days) 1984/10/ /11/08, 1984/11/ /12/ /01/ /03/02 (32days) 1987/03/ /04/23 (44days) (27days) Well Diameter (Bottom) 5-5/8 5-7/8 5-7/8 8-1/2 8-1/2 Temperature at Bottom hole ( ) Contractor Genie Rural* GENZL GENZL INTAIRDRIL INTAIRDRIL *Now called Direction de l eau Source: Compiled by the Survey Team Teweo-1 Hanle-1 Hanle-2 Garabbayis-2 Garabbayis-1 Figure 2-5 Location Map of the Existing Wells Source: The Survey Team Japan International Cooperation Agency 2-5

30 The features of the existing wells are discussed below Geological Structure The features that can be deduced from the geological data are as follows: In the exploration well, basalt layer has thick distribution. In Teweo-1 and Hanle-1, the rhyolite layer appeared between the basalt layers. Distribution depth is as follows: Teweo-1: m, Hanle-1: m, m, m. Alluvium was confirmed in the surface portion of Teweo-1, Hanle-1, and Hanle-2. Mudstone layer was confirmed on Teweo-1 at the depth of 65 m-257 m. The geological column of each exploration well is attached Alteration Minerals The alteration minerals occurrence depth in each exploration well is shown in Figure 2-6. Documentation indicating the alteration mineral occurrence for Garabbayis-1 was not available. As a feature of the whole alteration minerals, low-grade alteration is observed characterized by occurrence of zeolites. The following issues are presumed by the combination of alteration mineral occurrence; The transition zone between heulandite (He) laumontite (Lm) is located at GL-1400m in Hanle-1, GL-1000m at Hanle-2, presumed that the zone was approximately 140 degrees of alteration environment. Smectite is disappeared and chlorite is commonly observed at the depth of 1400m in hanle-2, presumed that the alteration environment is 180 to 200 degrees. Epidote (EP) and Hematite (Hm) is observed at the limited depth of 200m and 300m. The appearance temperature of those minerals are approximately 200 degrees, therefore those minerals are originated by vein-let hydrothermal alteration. Pyrite is intermittently observed at the depth from GL-1000m to 1900m, indicates hydrothermal alteration caused by acidic fluid. Occurrence of zeolite and chlorite is described, but the detail is not identified in Garabbayis-2 and Teweo-1, indicates that the data may not be reliable. Combination of alteration minerals deeper than the depth of GL-1500m may indicate more than 200 degrees of alteration environment. Japan International Cooperation Agency 2-6

31 Depth Garabbayis-2 Teweo-1 Hanle-1 Hanle-2 Si Hm Ch Ze Si Hm Qz Ze Ep Cc Sm Si Ch Qz He Lm Cc Sm Si Py Ch Qz He Lm Cc Calcite Ch Chlorite Ep Epidote He Heulandite Hm Hematite Lm Laumontite Py Pyrite Qz Quartz Si SiO2 Sm Smectite Ze Zeolite Source: Compiled from Geotermica (1985) and Aquater(1989) Figure 2-6 Distribution Chart of Altered Minerals Distribution of Permeability On each exploration well, the depths of high permeability and presence of aquifer are shown in Table 2-3. The aquifer is observed at depths of m, m, and m in the shallow part for several wells. This indicates that the aquifer is continuous in the horizontal direction. In the deeper part (deeper than 1,000 m), an aquifer was only identified at the depth of 1,300 m in Hanle-1, and was supposed to low permeability (Aquater (1987 b)). But because deep well was drilled only two sites, this fact is not enough to conclude the permeability of Hanle area is low. In addition, the groundwater levels of Garabbayis-1, Garabbayis-2, and Teweo-1 observed in December 1984 were 113 m, 60 m, and 17 m, respectively. This indicates a decrease of groundwater level in the direction from the plain side to the plateau side. Shallower than 1000 m Deeper than 1000 m Table 2-3 List of Aquifer Depth Garabbayis-1 Garabbayis-2 Teweo-1 Hanle-1 Hanle-2 83 m 95 m 90 m 95 m m 150 m 130 m m 260 m 180 m 364 m 310 m 405 m m About 1300 m - Source: The Survey Team Wellbore Temperature Figure 2-7 shows the temperature contour in -500 m a.s.l, which is assumed from the confirmed underground temperature distribution in each well. It was assumed to be consistent with the structure of NNW-SSE. It is confirmed that there is a tendency of temperature increase from the Hanle Plain side to the plateau side. The underground temperature distribution of each well is summarized in Figure 2-8. Japan International Cooperation Agency 2-7

32 Figure 2-7 Contour Map of Underground Temperature(- 500 m a.s.l) Source: The Survey Team Figure 2-8 Temperature Profiles in the Existing Wells Source: Modified from Aquater (1989) Japan International Cooperation Agency 2-8

33 2.4 Summary of Existing Surveys Conclusion of Existing Survey Based on the survey results, Aquater (1989) described the following conclusions: The Hanle Plains can be characterized as a low temperature system where the temperature is controlled by groundwater circulation. The zone with an almost constant temperature from about 400 m to 1,000 m in Hanle-2 could be related to the local thermal anomaly originated by the upflow of hot fluids at the Garabbayis fumaroles. The possibility of finding high enthalpy fluids for electric power generation within the Hanle Plains was very low. In addition, Jalludin (2009) concluded the following: Any shallow thermal anomalies related to intrusions or magma chamber do not exist in the Hanle Plain. The fumaroles of Garabbayis would represent an exceptional situation, where the major fault system is connected to some very deep thermal anomalies. From the results of existing studies, the presence of geothermal system in the Hanle Plain is contradicted. However, the presence of fumaroles on the plateau side suggests the possibility of the existence of geothermal system Interpretation of the Survey Team Based on the existing survey results described above, the following are assumed for the geothermal system of the Hanle Region. 1. As to the results of test well drilling, temperature of the deep part of Hanle Plain is low and the wells located in the northeastern part of the plain have slightly higher temperature (Figure 2-7). 2. The results of temperature distribution of the test wells indicated that a heat source causes the fumaroles at the surface, which is believed to suggest the presence of heat source in the plateau side. This is consistent with the fact that fumaroles are observed on the plateau. 3. The reason of low temperature of wells that have been drilled in the Hanle Plain is inferred to be due to the presence of groundwater flow in the Hanle Plain. In addition, hydraulic gradient indicates the possibility that the source of groundwater is in the Hanle Plain side. 4. In the geochemical survey under the JICA Survey (2014), the possibility of a temperature of about 250 ºC on the reservoir has been pointed out. From the above, the presence of geothermal system may exist under the plateau that extends to the northeast of the Hanle Plains. Therefore, the Magneto-Telluric (MT) and Transit Electro-magnetic (TEM) surveys were performed on the plateau, in order to reveal this assumption. Japan International Cooperation Agency 2-9

34 Chapter 3 Geophysical Survey 3.1 Objectives In one of the target fields for geothermal development in the project, the Magneto-Telluric (MT) survey, which is one of the electromagnetic survey methods, was conducted to study the subsurface resistivity structure. The Transit Electro-magnetic (TEM) survey was carried out to have static correction of MT data. The acquired data were processed and analyzed to clarify the underground resistivity structures of the target field. The geology and geological structures were deduced from the subsurface resistivity distribution and the geophysical information of deep zone to contribute to the creation and estimation of geothermal reservoir model and the planning of test drilling survey was obtained. 3.2 Survey Results Outline of Survey The following are the contents of MT survey and TEM survey carried out in the project. The location map and stations map of MT and TEM surveys are shown in Figures 3-1 and 3-2, respectively. The list of the coordinate system of the stations is at the back of the report. Survey Method MT method with far remote reference site TEM method with central loop system(for static correction of MT data) Survey Site The survey area was decided by referring to the existing geological information and well drilling exploration. In this survey, the deployment of MT/TEM stations was decided with a central focus on the horst where manifestations of fumaroles are observed in the northeast part of Hanle Plateau. Operation Date March 28, 2015 ~ May 5, 2015 Number of Stations 30 stations, Remote reference station in Dikhil Acquired Data MT method: Three components of magnetic field (Hx, Hy, Hz) and two components of electric field (Ex, Ey) in time series data (Measurement time: More than 14 hours per one station) TEM method: One component of magnetic field (Hz) of transient response Number of Frequency for Data Processing and Analysis MT method: 80 frequencies ranging from 320 Hz to Hz TEM method: Two kinds of repeat rate: 2.5 Hz and 25 Hz Japan International Cooperation Agency 3-1 Nippon koei Co., Ltd. Sumiko Resources Exploration & Engineering Co., Ltd. JMC Geothemal Engineering Co., Ltd.

35 3.2.2 Results of Survey (1) TEM Survey TEM survey was conducted at all stations of the MT measurement. Regarding the acquired data quality, although data scatters were observed in a few windows at later times in several stations, good quality data applicable to 1D inversion analysis were acquired. 1D inversion analysis of resistivity layer was executed using the observed data at each station. Layered resistivity structures, which show the resistivity variation of high-low-high from surface to deep zone were obtained at almost all stations. From these results, MT responses were calculated and the apparent resistivity and phase curves were created; and the offset values for static correction were estimated. After applying the offset values to the apparent resistivity curves observed through the MT method, 2D inversion analysis of resistivity structure was executed. The list of offset values for static correction and the results of 1D inversion analysis of resistivity layer are at the back of the report. (2) MT Survey After the acquired data were processed using the local reference method or the remote reference technique, the apparent resistivity and phase curves were created, and the data quality of each measuring station was evaluated. The data qualities of almost all stations from high frequencies to low frequencies were good. Although at some stations, the apparent resistivity curve shows a little scatter in local reference data processing, noises were reduced and data quality was improved after remote reference data processing and data editing Results of 2D Inversion The location map and stations map of MT and TEM surveys are shown in Figures 3-1 and 3-2, respectively. The list of the coordinate system of the stations is at the back of the report. As described above, the good data has been acquired from the high frequencies to low frequencies, and the resistivity structure between -10,000 m elevation and the surface was estimated. But in the following, the characteristics between -5,000 m and the surface were described. This range is important to construct the geothermal reservoir model. And in order to explain the trend of resistivity distribution, resistivity value of 100 ohm-m was used as a criterion. (1) Resistivity Cross Section Map The following are the characteristics of the resistivity structure from each cross section of the profile. HNL100 profile (Figure 3-3) The shallow zone is conductive, and the deep zone is resistive from the ground surface to the deep zone of -5,000 m elevation. From 4 ohm-m to more than 2,500 ohm-m resistivity is distributed on the whole cross section. The low resistivity of less than 100 ohm-m is distributed from the surface to about -1,500 Japan International Cooperation Agency 3-2 Nippon koei Co., Ltd. Sumiko Resources Exploration & Engineering Co., Ltd. JMC Geothemal Engineering Co., Ltd.

36 m elevation in the southwest part and from the surface to about -800 m elevation in the northeast part. This low resistivity layer of less than 100 ohm-m tends to become thin gradually from southwest to northeast. At around -5,000 m elevation, the highest resistivity is shown in the northeast side and from northeast to southwest, the resistivity value is decreasing. From -5,000 m elevation to the downward direction, the resistivity value is becoming lower. HNL200 profile (Figure 3-4) Same as the case of HNL100 profile, the shallow zone is conductive, and the deep zone is resistive. The range of resistivity is from 2 ohm-m to more than 2,500 ohm-m. The low resistivity of less than 100 ohm-m is distributed from the surface to about -1,800 m elevation in the southwest part and from the surface to about -900 m elevation in the northeast part. This low resistivity layer of less than 100 ohm-m tends to become thin gradually from southwest to northeast. At around -5,000 m elevation, the highest resistivity is observed in the northeast side and from northeast to southwest, the resistivity value is decreasing same as in the HNL100 profile. HNL300 profile (Figure 3-5) Same as HNL100 and HNL200 profiles, the shallow zone is conductive, and the deep zone is resistive. The range of resistivity is from 1 ohm-m to more than 2,500 ohm-m. The lowest resistivity is around the surface at HNL-306 station. The low resistivity of less than 100 ohm-m is distributed from the surface to about -1,700 m elevation in the southwest part and from the surface to about -900 m elevation in the northeast part. This low resistivity layer of less than 100 ohm-m tends to become thin gradually from southwest to northeast. At around -5,000 m elevation, the highest resistivity is observed in the northeast side and from northeast to southwest, the resistivity value is decreasing same as in the HNL100 and HNL200 profiles. HNL400 profile (Figure 3-6) Same as HNL100, HNL200, and HNL300 profiles, the shallow zone is conductive, and the deep zone is resistive. The range of resistivity is from 2 ohm-m to more than 2,500 ohm-m. Around the surface at HNL-403~HNL-404 and HNL406 stations, the lowest resistivity is observed. The low resistivity of less than 100 ohm-m is distributed from the surface to about -1,500 m elevation in the southwest part and from the surface to about -1,000 m elevation in the northeast part. Although this low resistivity layer of less than 100 ohm-m tends to become thin gradually from southwest to northeast, the contour line of 100 ohm-m shows a little sign of increasing and decreasing. At around -4,500 m elevation, the highest resistivity is observed in the northeast side and from northeast to southwest, the resistivity value is decreasing similar with HNL100, HNL200, and HNL300 profiles. HNL500 profile (Figure 3-7) The shallow zone is conductive, and the deep zone is resistive, same as with the HNL100, HNL200, Japan International Cooperation Agency 3-3 Nippon koei Co., Ltd. Sumiko Resources Exploration & Engineering Co., Ltd. JMC Geothemal Engineering Co., Ltd.

37 HNL300 and HNL400 profiles. The range of resistivity is from 3 ohm-m to more than 2,500 ohm-m. The lowest resistivity is distributed around the surface at HNL-506 station. The low resistivity of less than 100 ohm-m is distributed from the surface to about -1,400 m elevation in the southwest part and from the surface to about -800 m elevation in the northeast part. This low resistivity layer of less than 100 ohm-m tends to become thin gradually from southwest to northeast. At around -4,500 m elevation, the highest resistivity is seen in the northeast side and from northeast to southwest, the resistivity value is decreasing similar with HNL100, HNL200, HNL300 and HNL400 profiles. The distribution of more than 2,500 ohm-m resistivity is small in extent compared with the other profiles. (2) Resistivity Plan Map The following are the characteristics of the resistivity structure from the resistivity plan map at each elevation. 100 m elevation (Figure 3-8) Less than 16 ohm-m resistivity is distributed in the whole survey area. In a large sense, the resistivity value is going down from west to east of the survey site. At the edge of the northeast part, the lowest resistivity of 4 ohm-m is observed m elevation (Figure 3-9) The range of resistivity distribution is from 10 ohm-m to 100 ohm-m. From the west side to east side of the survey site, the resistivity value gradually becomes higher and is highest at the northeast side of the HNL100 profile. The contour lines extend in the northwest to southeast direction and the contour interval is almost equal. It means resistivity varies gradually. -1,000 m elevation (Figure 3-10) The range of resistivity distribution is from 25 ohm-m to 600 ohm-m. The resistivity value is becoming higher from the west part to the east part. The contour lines mainly extend in the northwest to southeast direction same as in the plan map of -500 m elevation. From the center to northeast side of the HNL300 and HNL400 profiles, the contour interval is narrow and this indicates resistivity discontinuity structure. -2,000 m elevation (Figure 3-11) The range of resistivity distribution is from 160 ohm-m to more than 2,500 ohm-m. The lowest resistivity value is seen at the southwest side of HNL300 profile and from west to east, the resistivity value increases. The contour lines mainly show the northwest to southeast direction same as the plan map of -1,000 m elevation. From the center to the northeast side of HNL300 and HNL400 profiles, the contour interval is narrow and it indicates resistivity discontinuity structure. Japan International Cooperation Agency 3-4 Nippon koei Co., Ltd. Sumiko Resources Exploration & Engineering Co., Ltd. JMC Geothemal Engineering Co., Ltd.

38 -4,000 m elevation (Figure 3-12) More than 400 ohm-m resistivity is distributed in the whole survey area. The lowest resistivity is shown around at the southwest edge of HNL200 and HNL300 profiles and from southwest to northeast, the resistivity value increases. In the northeast part of the survey site especially, more than 2,500 ohm-m resistivity is largely distributed. -10,000 m elevation (Figure 3-13) The range of resistivity distribution is from 250 ohm-m to more than 2,500 ohm-m. In comparison with the plan map of -4,000 m elevation, the value of the resistivity distribution is totally lower. Less than 400 ohm-m resistivity is distributed widely in the southwest part of the survey area and the resistivity value increases to the northeast. The contour lines mainly show the northwest to southeast direction Conclusions of 2D Inversion The following are the characteristics of the resistivity structure in Hanle Geothermal Field. And the panel diagrams of resistivity cross section and plan map are shown in Figures 3-14 and 3-15, respectively: The resistivity structure consists of three zones, namely: conductive overburden, resistive intermediate thick zone, and conductive deeper zone at a depth from the surface to -10,000 m elevation. The resistivity distribution is roughly ranging from 1 ohm-m to 2,500 ohm-m. The contour line, as the boundary of 100 ohm-m resistivity between conductive overburden and resistive intermediate zones, is located from -1,500 m to -2,000 m elevation at the southwest side of the survey site, and its location becomes shallow to the northeast direction and is roughly ranging from -500 m to -1,000 m elevation at the northeast side of the survey site. In a large sense, resistivity distribution may change from conductive to resistive from the southwest side to the northeast side. From -1,000 m to -2,000 m elevation, the interval of contour lines is relatively narrow. It suggests the resistivity discontinuity which shows drastic change of resistivity value. The conductive overburden is thin in the graben part of the survey site and thick in the horst part while the intermediate resistive zone shows a large value in the horst part and a small value in the graben part of the survey site. The location of resistivity discontinuity, which shows drastic change of resistivity, mainly coincides with the boundary between the graben and the horst. In all the profiles, the highest resistivity (>2,500 ohm-m) is observed from -4,000 m to -5,000 m elevation and this high resistivity is distributed widely with a central focus on HNL200 and HNL300 profiles. Japan International Cooperation Agency 3-5 Nippon koei Co., Ltd. Sumiko Resources Exploration & Engineering Co., Ltd. JMC Geothemal Engineering Co., Ltd.

39 Legend :MT survey site :Reference station Figure 3-1 Location Map of MT Survey Site Source: The Survey Team Japan International Cooperation Agency 3-6 Nippon koei Co., Ltd. Sumiko Resources Exploration & Engineering Co., Ltd. JMC Geothemal Engineering Co., Ltd.

40 Legend HNL-501 :Location of Station Figure 3-2 Location Map of MT Stations Source: The Survey Team Japan International Cooperation Agency 3-7 Nippon koei Co., Ltd. Sumiko Resources Exploration & Engineering Co., Ltd. JMC Geothemal Engineering Co., Ltd.

41 Figure 3-3 Resistivity Cross Section (HNL100) Japan International Cooperation Agency 3-8 Nippon koei Co., Ltd. Sumiko Resources Exploration & Engineering Co., Ltd. JMC Geothemal Engineering Co., Ltd.

42 Figure 3-4 Resistivity Cross Section (HNL200) Japan International Cooperation Agency 3-9 Nippon koei Co., Ltd. Sumiko Resources Exploration & Engineering Co., Ltd. JMC Geothemal Engineering Co., Ltd.

43 Figure 3-5 Resistivity Cross Section (HNL300) Japan International Cooperation Agency 3-10 Nippon koei Co., Ltd. Sumiko Resources Exploration & Engineering Co., Ltd. JMC Geothemal Engineering Co., Ltd.

44 Figure 3-6 Resistivity Cross Section (HNL400) Japan International Cooperation Agency 3-11 Nippon koei Co., Ltd. Sumiko Resources Exploration & Engineering Co., Ltd. JMC Geothemal Engineering Co., Ltd.

45 Figure 3-7 Resistivity Cross Section (HNL500) Japan International Cooperation Agency 3-12 Nippon koei Co., Ltd. Sumiko Resources Exploration & Engineering Co., Ltd. JMC Geothemal Engineering Co., Ltd.

46 Figure 3-8 Resistivity Plan Map (-100 m elevation) Figure 3-9 Resistivity Plan Map (-500 m elevation) Japan International Cooperation Agency 3-13 Nippon koei Co., Ltd. Sumiko Resources Exploration & Engineering Co., Ltd. JMC Geothemal Engineering Co., Ltd.

47 Figure 3-10 Resistivity Plan Map (-1,000 m elevation) Figure 3-11 Resistivity Plan Map (-2,000 m elevation) Japan International Cooperation Agency 3-14 Nippon koei Co., Ltd. Sumiko Resources Exploration & Engineering Co., Ltd. JMC Geothemal Engineering Co., Ltd.

48 Figure 3-12 Resistivity Plan Map (-4,000 m elevation) Figure 3-13 Resistivity Plan Map (-10,000 m elevation) Japan International Cooperation Agency 3-15 Nippon koei Co., Ltd. Sumiko Resources Exploration & Engineering Co., Ltd. JMC Geothemal Engineering Co., Ltd.

49 Figure 3-14 Panel Diagram of Resistivity Cross Sections Japan International Cooperation Agency 3-16 Nippon koei Co., Ltd. Sumiko Resources Exploration & Engineering Co., Ltd. JMC Geothemal Engineering Co., Ltd.

50 100m Elev. -500m Elev m Elev m Elev m Elev m Elev. Figure 3-15 Panel Diagram of Resistivity Plan Maps Japan International Cooperation Agency 3-17 Nippon koei Co., Ltd. Sumiko Resources Exploration & Engineering Co., Ltd. JMC Geothemal Engineering Co., Ltd.

51 Chapter 4 Supplementary Surveys 4.1 Overview of Geology and Topography Geological Structure The geological map of the survey area (ORSTOM, 1987) is shown in Figure 4-1. Quaternary volcanic rocks (Afar Stratoid) are widely distributed in the survey area. Major geological layers are the lower basalt layer ( Ma), upper basalt layer ( Ma), and uppermost basalt layer (1.25 is a Ma). Rhyolite layer ( Ma), which is almost the same age as the lower basalt layer, is developed in the north. Basalts form a plateau, covering a wide range including the MT/TEM survey area. In addition, the uppermost basalt layer develops as volcanic corns in the NW-SE direction on the plateau. From ORSTOM (1987), there are some fumaroles on the plateau of the study area. They appear at the boundary portion of the lower and upper basalt layers. However, there are no fumaroles on the area covered by the upper basalt layer. N Survey Area LEGEND Alluvium Basalt (uppermost Afar Stratoid: βs III, Ma) Basalt (upper Afar Stratoid: βs II, Ma) Basalt (lower Afar Stratoid: βs I, Ma) and lower Rhyorlte Figure 4-1 Geological Map of the Survey Area Source: ORSTOM (1985) Fault Distribution For obtaining the fault structure constituting the geothermal system in the study area, the Survey Team analyzed the fault distribution using terrain data. The ASTER GDEM 30 m grid data has been used in the analysis to create the inclination distribution and direction maps (Figure 4-2). The parts that are Japan International Cooperation Agency 4-1 Nippon koei Co., Ltd. Sumiko Resources Exploration & Engineering Co., Ltd. JMC Geothemal Engineering Co., Ltd.

52 considered faults were extracted from the inclination distribution map, and the slope of each fault was estimated using the inclination direction map. The estimated fault distribution is shown in Figure 4-3. Fault strike is dominant in the NW-SE direction. In particular, large-scale fault is recognized in the northeast and southwest end of the lava plateau, which is inclined to the plain side. Lava plateau forms a horst structure. The main features are described below. The fault that developed in the rhyolite layer is not continuous to the upper basalt areas of the lava plateau. On the geological map, the fault was drawn in the boundary part of upper and lower basalt layers (Figure 4-1). But in Figure 4-2, it is not observed. It is considered that the lower basalt is covered by the upper basalt. Formation history of the terrain in this region is estimated: (i) the formation of the fault located on the southwest edge of rhyolite, (ii) effusion of the lower and upper basalt, and (iii) formation of large-scale fault that separates the northeast edge of the lava plateau. Inclination Distribution Inclination Direction Figure 4-2 Inclination Distribution Map and Inclination Direction Map Source: The Survey Team Japan International Cooperation Agency 4-2 Nippon koei Co., Ltd. Sumiko Resources Exploration & Engineering Co., Ltd. JMC Geothemal Engineering Co., Ltd.

53 Source: The Survey Team Figure 4-3 Fault Distribution Map Based on the geological structure and lineament estimation results, geological conceptual cross sectional map including the study area were created (see Figure 4-4). SW NE II I Hanle Plain IV (Not in Scale) MT Survey Area Fumarole III Plateau Gaggade Plain II IV II I I I Legend III IV. Alluvium III. Basalt (uppermostafarstratoid:βs III, Ma) II. Basalt (upper Afar Stratoid:βS II, Ma) I. Basalt (lower Afar Stratoid: βs I, Ma)and lower Source: The Survey Team Figure 4-4 Conceptual Geological Cross Section Japan International Cooperation Agency 4-3 Nippon koei Co., Ltd. Sumiko Resources Exploration & Engineering Co., Ltd. JMC Geothemal Engineering Co., Ltd.

54 Data Collection Survey for Site Survey and Laboratory Analysis Surface Manifestation In order to confirm the distribution of geothermal manifestations in the survey area, geological reconnaissance was conducted in parallel with the geophysical surveys. As a result, the fumarole area has been confirmed in the three sites around the geophysical survey area. Location map is shown in Figure 4-5. The maximum temperature and the extent of geothermal manifestations are summarized in Table 4-1. The largest manifestation is point ③; the distribution of the surface high temperature area is about 500 m (Figure 4-6). It should be noted that the fumarole located at the southern end of point ③ has been subject to gas analysis in the JICA Survey (2014). Source: The Survey Team Figure 4-5 Location Map of Geothermal Manifestation Table 4-1 Site Number ① ② ③ Max. Temp List of Geothermal Manifestation Length About 140 m About 80 m About 500 m Width Max. 30 m Max. 30 m Max. 130 m Direction NNW-SSE NE-SW NW-SE Source: The Survey Team Japan International Cooperation Agency 4-4 Nippon koei Co., Ltd. Sumiko Resources Exploration & Engineering Co., Ltd. JMC Geothemal Engineering Co., Ltd.

55 Site 1 Site 2 140m 80m Site m Garabbayis Source: The Survey Team Figure 4-6 Distribution Map of Geothermal Manifestation Japan International Cooperation Agency 4-5 Nippon koei Co., Ltd. Sumiko Resources Exploration & Engineering Co., Ltd. JMC Geothemal Engineering Co., Ltd.

56 4.2.2 Geochemical Survey (1) Objectives Last year, a gas geochemical survey was conducted for a fumarole located in Garabbayis, Hanle under the JICA Survey (2014). The survey conducted this year is an additional survey, to study more precisely the area and chemical change of the geothermal steam supplied. For this purpose, two fumaroles including the one surveyed last year were examined. Also, the distribution and temperature of spots of hot and wet soil were investigated. The spots of the hot and wet soil mean that the small area lacks steam but is wet by the hot water condensed from the fumarolic steam at the surface. (2) Survey Area The survey area is shown in Figure 4-7. The area contains an existing test well "Garabbayis-1 (435 m depth) and geothermal manifestations (fumaroles and spots of hot and wet soil) located east of the well. Figure 4-8 shows photographs of the geothermal manifestations, and Figure 4-7 depicts the distribution of temperature of the manifestations. Among these fumaroles, the two strongest fumaroles were sampled. Fumarole (FR) No. 1: A fumarole that was examined last year. Fumarole (FR) No. 2: A fumarole about 130 m away from FR No. 1 in the NNW direction. Figure 4-7 Geochemical Survey Area Source: The Survey Team Japan International Cooperation Agency 4-6 Nippon koei Co., Ltd. Sumiko Resources Exploration & Engineering Co., Ltd. JMC Geothemal Engineering Co., Ltd.

57 Source: The Survey Team Figure 4-8 Photographs of Geothermal Manifestations in Garabbayis (3) Results and Discussion Table 4-2 shows the results of chemical analysis for fumarolic gas sampled in the last two years (FR No. 1 in 2014 and 2015, and FR No. 2 in 2015). The He-Ar-N 2 trilinear diagram, which is based on the analytical results, is shown in Figure 4-9. In this figure, other fumarolic gas samples taken in other geothermal fields in Djibouti are plotted. As seen in Figure 4-9, FR No. 2 and FR No. 1 (2014) show the same chemical composition even though the two samples were taken from different fumaroles in different years. Because the composition shows less contribution of atmospheric component, the fumaroles are obviously supplied with geothermal steam originating from a geothermal reservoir. In addition, other fumaroles and spots of hot and wet soil are distributed around the two fumaroles sampled. These geothermal manifestations are distributed in the NW-SE direction with length of about 500 m and maximum width of 130 m (Figure 4.1). As a result, Japan International Cooperation Agency 4-7 Nippon koei Co., Ltd. Sumiko Resources Exploration & Engineering Co., Ltd. JMC Geothemal Engineering Co., Ltd.

58 it can be said that the geothermal steam found in the FR No. 2 and FR No. 1 (2014) are supplied in the 500 m long area of the manifestations. Although FR No. 1 (2015) was sampled at the same position of FR No. 1 (2014), the sample showed almost same composition as the atmospheric one in Figure 4-9. This indicates that the mixing ratio of atmospheric component in the gas sampled in 2015 is larger than that in This might be because the supply of geothermal steam could have been somewhat less during the survey in Table 4-2 Results of the Chemical Analysis for Fumarolic Gas in Garabbayis Source: The Survey Team Japan International Cooperation Agency 4-8 Nippon koei Co., Ltd. Sumiko Resources Exploration & Engineering Co., Ltd. JMC Geothemal Engineering Co., Ltd.

59 Gas geothermometers were applied to the gas composition of FR No. 2, and the results were compared with that of FR No. 1 (2014). The geothermometers used are H 2 /Ar, CO 2 /Ar, and CH 4 /CO 2. Calculated temperatures are described as t HA, t CA, and t MC, respectively. These gas geothermometers are influenced by changes in temperature and redox state while the steam ascends. The response to those changes can be more rapid in the order of H 2 /Ar, CO 2 /Ar, and CH 4 /CO 2 geothermometers. Consequently, it is expected that the t MC geothermometer indicates a temperature of the deepest portion of the reservoir (generally the highest temperature), and t HA geothermomter offers a temperature of the shallowest temperature (generally the lowest temperature). Source: The Survey Team Figure 4-9 He-Ar-N 2 Ternary Diagram for Garabbayis Fumarolic Gases As can be seen in the calculated temperatures in Table 4.1, the temperatures are higher in the order of t MC, t CA, and t HA, which indicates the expected characteristics of the thermometers mentioned above. Calculated t HA, which is about 70 C, is much lower than the temperature measured at fumaroles. For this reason, t HA is excluded from the estimation of reservoir temperature. Calculated t CA shows a range from 120 C to 160 C, and t MC ranges from 230 C to 260 C. From these results, it can be assumed that there is a geothermal reservoir with the highest temperature of 260 C at the depth of Garabbayis. (4) Conclusion In the east side of an existing test well, Garabbayis-1, fumaroles and spots of hot and wet soil are distributed in the NW SE direction with a length of 500 m. Geothermal steam producing the geothermal manifestations can be steadily supplied from a geothermal reservoir which has the highest temperature of 260 C. Based on this interpretation, it follows that Garabbayis is an appropriate location for new test drilling to prove the presence of a geothermal reservoir. Japan International Cooperation Agency 4-9 Nippon koei Co., Ltd. Sumiko Resources Exploration & Engineering Co., Ltd. JMC Geothemal Engineering Co., Ltd.

60 Chapter 5 Geothermal Reservoir Model and Target for Geothermal Test Wells 5.1 Construction of Conceptual Model Geothermal Reservoir and Resistivity Structure Examples of typical underground resistivity structure observed in geothermal area, refer to the findings of Iceland (Arnason et al (1987): Figure 5-1). As a feature of this resistivity structure, the following three points are stated: 1) the resistivity structure is divided into three zones such as the upper high resistivity zone, lower resistivity zone, and high resistivity zone, 2) discontinuous structure (vertical fault) appears in horizontal direction, and 3) the range of resistivity shows from several ohm-m to several hundred ohm-m. Figure 5-1 Geothermal Reservoir and Resistivity Structure This resistivity structure is correlated with hydrothermal alteration zoning and corresponding temperatures as shown in Table 5.1. Upper zone Low resistivity zone High resistivity zone Árnason et al. (1987) Table 5-1 Relation between Resistivity and Alteration Minerals and Temperature Resistivity Relation with Alteration Mineral (Zone) Several hundreds several thousands Ωm Below 10 Ωm (or 5 Ωm) Several tens to several hundreds Ωm <Non alteration zone.> Volcanic ash, surface deposit, non-alteration volcanic rocks <Clay zone (Cap rock)> Alteration zone including smectite, Mixed layer clay mineral, zeolite <Chlorite epidote zone (Reservoir)> Alteration zone including chlorite, illite, epidote (and garnet) Estimated Temperature o C o C o C Source:METI (2010) supplemented by The Survey Team Japan International Cooperation Agency 5-1

61 The resistivity structure of Hanle shows larger resistivity, which does not necessarily correspond to the typical pattern. Table 5-1 may not be adopted in the case of the Hanle site. This may be because that alteration in Hanle has not been developed well yet. However, from the fact that there is a clear geothermal manifestations in Hanle site, the presence of a geothermal reservoir of different resistivity structure is estimated. The resistivity structure revealed by the survey in Hanle is interpreted as follows: the topmost several tens Ωm may correspond to alteration zone (cap rock structure); the lowest zone of 1,000 Ωm or more may be an intrusion, which may be interpreted as a heat source; and the zone in between the two may be the reservoir. For this reason, distribution area of reservoir was estimated by shown in following chapter Resistivity Structure of Hanle Site The correlation between resistivity and geothermal reservoir structure was examined in reference to the past test wells drilled in Hanle in the 1980s. The drilling record of one previous well, Hanle-2 (2,038 m), indicates smectite and chlorite, which are good indications of cap rock and reservoir, respectively. The depths and resistivity were correlated. The lowest depth of cap rock is correlated with 40 Ωm, which corresponds to the lowest depth of smectite emerging; whereas the depth of reservoir is correlated with 160 Ωm, which corresponds to the bottom depth of the Hanle-1 well, at the bottom of which chlorite emerges. Table 5-2 Geothermal Structure and Resistivity Zone Resistivity Geothermal Structure Elevation Upper low resistivity zone 40 Ωm or less Cap rock -500 m or shallower High resistivity zone From 40 to 160 Ωm Geothermal reservoir -500 m to m Ultra high resistivity zone 1,000 Ωm or more Heat source m or deeper Source: The Survey Team Japan International Cooperation Agency 5-2

62 Source: The Survey Team Figure 5-2 Resistivity and Alteration Mineral Preliminary Geothermal Reservoir Model The observations/information and interpretations necessary for the construction of preliminary geothermal reservoir model are summarized in Table 5-3, based on the past survey results and the geophysical survey conducted. Table 5-3 Summary of Observations and Interpretations Observation Geothermal System Interpretation Temperature at 500 m depth of the past 5 test wells increases from the plain side to the plateau side (40 ºC 90 ºC 120 ºC) Heat source Fumaroles are observed only in the plateau area. The heat source may exist under the plateau area. The confirmed fumaroles seem to be on the extension line of the major faults. The confirmed fumaroles exist on the margin of the upper basalt. The fumarole includes mantle origin gas, and the geothermometer indicates 260 ºC Groundwater level in the Hanle Plain is higher than that in the plateau area. There is a distinct difference of resistivity structure between the plain side and the plateau side. Reservoir Reservoir Fluid Fluid recharge Regional geological structure Fumaroles may emerge along the faults in rhyolite and/or lower basalt layer. The upper basalt may act as the cap rock of the reservoir. Fluid with high temperature may exist. There may be recharging from the plain side to the plateau side. There may be major fault between the plain and the plateau. Japan International Cooperation Agency 5-3

63 Ultra high resistivity zone (1,000 Ωm or more) is identified below elevation -3,000 m in the plateau side. Heat source This may be an intrusion body that retains high temperature. Source: The Survey Team Based on the above information and interpretation, the following three cases are proposed as the preliminary geothermal reservoir model. Reservoir Fluid Table 5-4 Preliminary Reservoir Conceptual Models Case (a) Figure 5-2 Case (b) Figure 5-3 Case (c) Figure 5-3 State of reservoir Not passed much time from the heat source intrusion High temperature reservoir is present locally Geothermal system is fully developed Geothermal fluid circulates, and reservoir is formed over a wide range Heat supply from the heat source is attenuated, and reservoir temperature decreases Area/zone Under the plateau Along faults Along major faults only where fumaroles are confirmed Permeability (hosted rock) High Low Low Temperature Origin Originated from the Hanle Originated from the Hanle Originated from the Hanle Plain Plains Plain Upflow Along fractured faults Along fractured faults Along the major fault only Heat source An intrusive rock below 3 km Source: The Survey Team Japan International Cooperation Agency 5-4

64 Data Collection Survey for SW NE Elevation: -1,000 m Source: The Survey Team Figure 5-3 Geothermal Conceptual Model: Case (a) Japan International Cooperation Agency 5-5

65 SW NE Elevation: -1,000 m Source: The Survey Team Figure 5-4 Geothermal Conceptual Model: Case (b) Japan International Cooperation Agency 5-6

66 Data Collection Survey for SW NE Elevation: -1,000 m Source: The Survey Team Figure 5-5 Geothermal Conceptual Model: Case (c) Japan International Cooperation Agency 5-7

67 5.1.4 Preliminary Evaluation of Geothermal Potential The reservoir resource assessment was conducted with volumetric method together with Monte Carlo simulation, based on the conceptual case (a). (1) Volumetric Method The prevailing calculation methods include parameters that may not have been clearly defined and therefore users are having difficulty in finding the appropriate specific digits for them. The following equation was proposed by the paper (S. Takahashi and S. Yoshida, 2015) assuming a single flash cycle, thereby parameters except the underground related parameters may be clearly defined. E ζr CV ( T T ) ( FL ) [kj/s] or [kw] (1) ex g r ref C ( 1 ) C r C [kj/s] or [kw] (2) r f f Where η ex : energy coefficient of turbo-generator, ζ:effective energy allocation function, φ: porosity of the reservoir rock, ρ r :Density of the reservoir rock, C r : Specific heat of the reservoir rock, ρ f :Density of geothermal fluid in the porosity of the reservoir rock, and C f : Specific heat of the geothermal fluid in the porosity of the rock. Temperatures of the separator and the condenser are assumed as ºC (5 bar) and 50 ºC, respectively, taking into account the heated conditions of Djibouti. In addition, since the term R g ρcv(t r -T ref ) in the equation (1) represents the heat collected at the well head and cast into the separator through heat insulated pipe system without losing heat energy, T ref =0.01. The effective energy allocation function is given below. ζ r 5 2 r T T T (3) 3 r 1 The energy efficiency is given by an approximate equation obtained from the data of existing power plants. When the separator temperature and condenser temperature are ºC and 50 ºC, respectively, the efficiency is: η ex= 0.77 ± 0.05 (4) Recovery factor is: R g = 0.05 ~0.20 (5) (2) Probabilistic Method - Monte Carlo Simulation Crystal Ball of Oracle Inc. was used for the Monte Carlo Simulation. The variable parameters are (1) reservoir temperature and (2) porosity and reservoir volume with triangular distribution. Japan International Cooperation Agency 5-8

68 (3) Assumed Parameters Parameters used for the calculation are shown in Table 5-5. The major parameters are as follows: Reservoir Volume: The minimum reservoir volume was set as zero since there will be a possibility that the reservoir may not be identified. Average Reservoir Temperature: The average reservoir temperatures are set from 200 ºC to 260 ºC with the median of 230 ºC, based on the geothermometer analysis results. Table 5-5 Parameters for the Volumetric Method Range Parameter Symbol Unit Min. M.L Max. Volume V m E E+10 Triangle Reservoir temperature Tr ºC Triangle Rock density ρr kg/m fixed Rock volumetric specific heat Cr kj/kg fixed Fluid volumetric density ρf kg/m fixed Fluid specific heat Cf kj/kg fixed Porosity Φ % 5-10 Uniform Recovery factor Rg % 5 20 Uniform Reference temperature for Tref ºC fixed flash type Rejection temperature T0 ºC fixed (condenser temperature) * Separator temperature* - ºC fixed Exergy efficiency for flash ηex % Triangle Plant factor F % fixed Plant life L year fixed Min.: Minimum; Max.: Maximum, M.L.: Most likely; tbp: to be proposed; *: given in the heat allocation f i Source: The Survey Team (4) Preliminary Resource Assessment The assessment results are shown in Table 5-6. Table 5-6 Preliminary Resource Assessment Capacity (MW) 80% Most Probable 20% Source: The Survey Team Probabilistic distribution The estimated preliminary resource is classified into the Inferred Geothermal Resource that shall be examined by a test well drilling supported by supplemental subsurface survey. Japan International Cooperation Agency 5-9

69 5.2 Target for Geothermal Test Wells A test well target is examined using a probable geothermal system model. Test well drilling is expected to meet fractures with high temperature and permeability, and the fractures can be associated with faults. For this reason, targets for a new test well in Garabbayis are examined using the three geothermal models that include inferred faults as mentioned in Section 5.1. Each of the models shows the distribution of geothermal reservoir along with the faults. Among them, Fault #1 is recognized as a main reservoir in any of the models. Furthermore, the fault is beside active surface manifestations, which means that Fault #1 is the highest priority as a target for the new test drilling in Garabbayis, Hanle. Design of drilling targets comprises three factors, i.e.: target position on the map, target depth, and wellhead location. For this design, the Garabbayis map shown in Figure 5-6 was used. The map contains Fault #1, geothermal manifestations, and the well pad for the existing Garabbayis-1 test well. (1) Target Position on the Map As seen in Figure 5-6, a part of Fault #1 overlapping the geothermal manifestations can be the target zone. In that zone, the locations of the most active manifestations can be a candidate for the target position on the map, as shown by a red circle in Figure 5-6. Source: The Survey Team Figure 5-6 Map for Planning of a New Test Well Drilling in Garabbayis Japan International Cooperation Agency 5-10

70 (2) Target Depth Target depth should correspond to the depth of a high temperature in the models. The altitude of the isotherm of 250 C is set at around -1,200 masl in the models; thus, the target depth should be at least 1,500 m from the surface whose altitude is ca. 300 masl. Considering more the uncertainty of the isotherm in the models, the target depth should be set at the depth ranging from 1,500 m to 1,800 m (-1,500 masl) as shown in Figure 5-7. Fault -1 Source: The Survey Team Figure 5-7 Target Depth in the Geothermal Reservoir Model (3) Wellhead Location The well pad of the Garabbayis-1 well can be used for a new test well. The well pad is made of concrete, offering a rigid and flat base for the drilling rig. (4) Preliminary Drilling Plan On the basis of the location of targets, preliminary drilling plan was examined. The plan has to deal with total drilling depth (TD), total vertical depth (TVD), and deviation of the well track. In the case where the well pad for Garabbayis-1 is used also for the new test well, the deviation should be 300 m to reach the farthest target. This deviation and targeted TVD (1,800 m) require a TD of 2,000 m with an inclination of the well less than 30. This plan is sufficiently acceptable with a normal 2,000 m class drilling rig. Japan International Cooperation Agency 5-11

71 Chapter 6 Preliminary Economic Analysis for IPP Participation The government of Djibouti intends to introduce IPP for construction, operation and maintenance of geothermal power station, once geothermal resources are confirmed. This chapter describes an analysis of economic viability for a case where an IPP should participate in the project as the power generation operator. The preliminary reservoir assessment conducted with probabilistic approach resulted in 32 MWe, 86.4 MWe and 16.9 MWe for the most probable occurrence, 20 % probable occurrence and 80 % probable occurrence respectively. Out of these, the assessment results of the probable occurrence of 80% shall be taken as the installed capacity when we examine an economic viability for the IPP participation. We thus assume the capacity of the Hanle geothermal power station at 15 MWe. The examination of economic viability was conducted through a comparison between the IPP breakeven power sales price sold out at the Hanle power station and the power purchase price by EDD at the substation of Ali Shabieh, with an assumption that the Hanle geothermal power station is connected with the existing substation at Ali Shabieh via overhead power transmission line. 6.1 Assumptions For the examination, assumptions are presented in Table 6-1 as follows. A plant factor 80% is assumed that is recommended to use for planning purposes by the Ministry of Economy, Trade and Industry of Japan, while a 90 % is assumed in ESMAP (2010). IPP shall bear the construction cost, except for the cost for test well drilling. Two cases of 60% and 70% as the well successful rate, since success of failure of well will have a significant impact on project economics. Costs for test wells are not included in the examination. Grant assistance from other sources is expected. Test wells are not to be converted to production wells even if successful. Table 6-1 Assumptions for Examination of IPP Breakeven Power Price Items Assumptions Notes Plant capacity 15 MW P = 80 % Plant factor 80 % Standard of Japan Cost bearing body IPP except for cost of test wells Well success rate 60 %, 70 % (for 2 cases) Cost of test wells Grant (8.4 M USD) 3 slim holes Use of test wells Not used for production wells 6.2 IPP Breakeven Power Sales Prices at the Power Station Source: JICA Survey Team The IPP breakeven power sales prices sold out at the Hanle geothermal power station are shown in Japan International Cooperation Agency 6-1

72 Table 6-2 below. Construction costs were determined with reference to past records around the world, taking into account scale effects of capacity. The calculation sheets used are included in the attachments. As the results, the IPP breakeven power sales prices were calculated as USD/kWh and USD/kWh for each well successful rate of 60 % and 70 % respectively. Table 6-2 IPP Breakeven Power Sales Prices Sold-out at the Hanle Geothermal Power Station Well Successful Rate 60 % 70 % Construction cost M-USD (7.0 M-USD/MW) 98.4 M-USD (6.6 M-USD/MW) Breakeven price at power station USD/kWh USD/kWh 6.3 Transmission Cost Source: JICA Survey Team The Hanle geothermal power station will be connected to the nearest substation of 63/20 kv at Ali Sabieh approximately 70 km from the Hanle geothermal power station; the Ali Sabieh substation being connected to the main substation at PK12 via 63kV transmission line. The following assumptions in Table 6-3 are made in order to calculate the transmission cost from the Hanle geothermal power station (15 MWe) to the substation at Ali Sabieh. Table 6-3 Assumptions for Transmission Cost Calculation Items Assumptions From and to From Hanle to Ali Sabieh Distance 70 km Capacity 63 kv Construction cost 17.5 M-USD (0.25 M-USD/km) Cost bearing body EDD Source: JICA Survey Team The transmission line will be of 63 kv, and approximately 70 km long; construction cost is estimated at 0.25 m-usd/km; EDD will be the responsible body for the construction and, operation & maintenance. Calculation sheets used are included in the attachment. As the result, the transmission cost was calculated at USD/kWh/ 6.4 Power Purchasing Cost at Ali Sabieh Substation. From the calculation results explained above, the power purchasing cost at Ali Sabieh substation by EDD are shown in Table 6-4. If the power plant is constructed with a successful rate 60% of production wells, the power purchase cost at Ali Sabieh substation by EDD will be USD/kWH; whereas the cost will be USD/kWh if the successful rate should be 70 %. Japan International Cooperation Agency 6-2

73 Table 6-4 Power Purchasing Cost at the Ali Sabieh Substation Well successful rate 60 % 70 % Note IPP breakeven cost (USD/kWh) IPP minimum sailing price of electricity at power station Transmission cost (USD/kWh) kv, 70 km EDD bearing cost (USD/kWh) Minimum cost of electricity at Ali Sabieh substation from Hanle geothermal Source: JICA Survey Team 6.5 A comparison with the power generation cost at the existing power plants Euei odf (2013) 1 reports that the fuel cost accounting to a significant part of the power generation cost was USD/ MWh (0.180 USD/kWh) in A comparison of the Hanle geothermal power plant (15 MWe) with the existing power plants thus results in: When the well successful rate is 60%, both case will have similar economic implication, When the well successful rate is 70%, the Hanle geothermal power station will economically superior to the existing power plants. If the transmission should be constructed with a financial arrangement that should exempt EDD from bearing or repaying, the Hanle geothermal power station will superior to the existing thermal plants in both cases of the well successful rate 60% and 70 % will. 6.6 Conclusions With information available at this stage, the reservoir resource of the Hanle geothermal prospect was evaluated at 15 MWe as the probable occurrence 80% that should be considered when IPP project is to be planned. This capacity is as a similar size as of a small hydropower plant. However, the Hanle geothermal power station will be economically superior to the existing oil thermal power plants if the transmission line should be constructed without financial burden to EDD. Presently, a significant part of the electricity is being purchased from Ethiopia. Although Ethiopia still has a large capacity of hydropower energy, the power purchase agreement between the two countries have entered into only for a period of Ethiopia wet seasons. On the other hand, power plants within Djiboutian territory are all of oil thermal power plant. Therefore, Djibouti does not actually have any power plants of indigenous energy source. Under this circumstance, constructing the Hanle geothermal power station, though the capacity is 15 MWe together with transmission line will be justifiable not only from economical point of view but also energy security point of view too. 1 Page 45, Elaboration d une strategie nationale et d un plan d action pour le developpement du secteur electrique a Djibouti ; Rapport Scenarios (Version Finale) Japan International Cooperation Agency 6-3

74 Chapter 7 Procedure of Environmental and Social Considerations 7.1 Environmental and Social Impact Assessment Study Decree /PR/MHUEAT (2011) shall be referred to for the Environmental Social Impact Assessment (ESIA), which describes the procedures to be followed. The decree classifies the assessment into two categories: (1) basic and (2) detailed. The detailed assessment is required for test well drilling and plan construction. Figure 7-1 shows the flow of procedural instruction. Citizens Project Proponent National Government Expert Team Technical Committee Draft Terms of Reference Order to check the Terms of Reference Opinion Site survey Final Terms of Reference Implementation of EIA Survey, Forecast, Evaluation Public hearing Opinion Draft EIS Report EIS Report Order to check the EIS report Publicity Desk study and Detail study Opinion Opinion Evaluation Final EIS Monitoring and taking measures to protect the environment Grant for Environment Clearance Periodical report Opinion Environment Audit Report Inspection END Source: JICA Survey (2014) Figure 7-1 ESIA Procedures Japan International Cooperation Agency 7-1

75 Assessment of the terms of reference (TOR) by the competent office needs about one month at least, Survey and report preparation may take two months, Assessment and approval of the report needs about three months, and A total of about six months are required to start the test well drillings. 7.2 Review of Existing Surveys(ESIA for Asal Geothermal Project) The Government of Djibouti is now in the process of conducting test well drilling in the Asal Geothermal Project with financial arrangement from the World Bank and others. ESIA was conducted by Fichiner in 2012 and the report is on the website of the Word Bank. The ESIA report conducted a field survey for the social conditions, and referred to the past well drilling record for the natural environmental assessment together with interview survey. 7.3 Draft Terms of Reference Since an ESIA is required before test well drilling in Hanle, a TOR has been drafted based on the results of the ESIA report for Asal in order to realize smooth implementation of the test well drilling. Japan International Cooperation Agency 7-2

76 Chapter 8 Proposal for Additional Surface Survey In the previous sections of this report, three types of geothermal reservoir models were proposed based on the MT/TEM survey conducted together with the information from past investigations. The resistivity structure obtained in Hanle has been revealed to be different from that of a typical geothermal reservoir. Although the next step for geothermal development is test well drilling, the Survey Team considers it prudent and necessary to verify the appropriateness of the proposed three geothermal reservoir models through additional surface survey. By this additional survey, the well target could also be refined. In addition to the scientific survey, data collection and analysis will also be necessary to prepare for the drilling works. This chapter describes the issues to be solved as well as proposes survey to solve these issues in order to realize test well exploration. 8.1 Issues to be Solved to Realize Test Well Exploration The following are the issues to be solved before implementation of test well exploration: To verify the appropriateness of the interpretation of geological structure (geological characteristics of the Hanle Plain and the plateau). A number of faults have been objectively confirmed by the lineament analysis using DEM data. The MT/TEM survey identified one major fault between the Hanle Plain and the plateau. Distribution of fracture together with regional geological structure has to be clarified. To improve knowledge on the characteristics of reservoirs The resistivity structure of Hanle is different from that of a typical geothermal reservoir. Even though, the Survey Team proposed three reservoir models based on the fact that there are geothermal manifestations. The appropriateness of these models, however, has to be verified with additional surface survey before test well exploration because the information at hand is considered not to be enough to confidently propose the reservoir model which could allow more reliable resource estimation. The drilling target may also be refined with the additional information. To understand the extent of the sheeted high resistivity zone below, and the very low resistivity zone in the surface zone of the northeast side of the plateau The high resistivity zone below is considered to be the heat source that would originate from intrusive rock; and the low resistivity zone in the surface zone of the northeast side of the plateau may form the cap structure of the reservoir. These resistivity structures extend beyond the present MT/TEM survey area. Since these are considered to be very important to Japan International Cooperation Agency 8-1

77 examine the geothermal system, the survey area has to be widened. This is also important to review the size of the reservoirs. 8.2 Proposal for Additional Survey The following three surface surveys are proposed: (1) gravity survey, (2) additional MT/TEM survey, and (3) micro-seismicity monitoring. In addition, the following surveys are proposed which are necessary for smooth implementation of test well exploration in the shortest time period: (4) ESIA for test well drilling and (5) preparatory survey for test well drilling works. The explanation for each survey is as follows: (1) Gravity Survey The gravity survey is proposed to identify regional geological structure, detailed geological anomaly in and around the reservoirs, and distribution of the deep sheeted high resistivity geology. A set of 300 measuring points are proposed with an interval of 1,000 m for regional investigation and 500 m in and around the geothermal reservoir. The layout of the measuring points is shown in Figure 8-1. Figure 8-1 Layout of Gravity Survey Measuring Stations Source: The Survey Team Japan International Cooperation Agency 8-2

78 (2) Additional MT/TEM survey The additional MT/TEM survey is proposed to grasp the distribution of the deep sheeted high resistivity zone and the low resistivity zone of the surface area in the northeast of the plateau. About 36 measuring points are proposed in the area neighboring the northern boundary of the previous MT/TEM survey points with an interval of approximately 1 km as shown in Figure 8-2. The additional survey will cover the fumarole points shown in the geological map in the north of the previous survey area. The survey will provide an underground information on a wider area of the plateau. 3D inversion method is proposed to analyze the obtained data. Source: The Survey Team Figure 8-2 Layout of the Additional MT/TEM Survey Points (3) Micro Seismicity Monitoring Micro seismicity monitoring is proposed to investigate the structure, extension, and fluid activity area of the geothermal reservoirs. This would provide information on the size of reservoirs. Japan International Cooperation Agency 8-3

79 A set of five monitoring points is proposed that encompasses the expected reservoir area in the middle as shown in Figure 8-3. Access conditions to the monitoring points are also considered. A minimum of three months are allocated for the monitoring. Based on Lépine and Hirn (1992), microseismicity monitoring has been conducted twice on Hanle site. The first monitoring has been carried out using the 7 seismometers in the period of March 1985 to June 1986 (Figure 8-4). At that time, swarm considered to be due to geothermal activity was observed below the fumarole area (Figure 4-5, 1) in depth of 3km. The second monitoring was performed using 30 seismometers in late 1986 (about three months). At this time, 10 events has been observed in depth of 8km or deeper. Figure 8-3 Layout of Monitoring Station of Micro Seismicity Source: The Survey Team Japan International Cooperation Agency 8-4

80 MT/TEM Survey Area Swarms Source: Lépine and Hirn (1992) Figure 8-4 Location of Micro Seismicity (4) ESIA ESIA for test well drilling is proposed in accordance with the proposed TOR. It will take at least six months from the submission of TOR to the competent governmental authority for final approval. This is important if the test well drilling should be implemented at earliest convenience. Figure 8-5 ESIA Process for Test Well Drilling Source: The Survey Team Japan International Cooperation Agency 8-5