Aceh demands higher stake in geothermal project

By Godang Sitompul

The Aceh provincial administration has demanded for a higher stake in the planned Seulawah Agam geothermal power plant project.

Aceh Governor Irwandi Yusuf has sent a letter to PT Pertamina Geothermal Energy (PGE), a subsidiary of state-owned oil and gas firm PT Pertamina, to change the share composition in PT Geothermal Energy Seulawah (GES), a recently set up joint venture company that would develop the geothermal project.

According to the recent joint venture agreement signed by PGE and Perusahaan Daerah Pembangunan Aceh (PDPA), a company owned by the Aceh provincial administration, PGE holds 75 percent stake in GES, while PDPA holds the remaining 25 percent. The Aceh government now proposes for the PDPA shares in GES at 25 percent during the exploration stage of the geothermal project, and then increases it to 30 percent during the exploitation period, thus lowering PGE?s stake to 70 percent.

Irwandi said that the entire funding for the exploration period will be initially bore by PGE. PDPA will then repay its share of the cost burden via part of the geothermal output when the project has started production. Meanwhile, PDPA?s share of the investment required during the exploitation period will be provided by PGE via competitive loan facility.

PGE President Director Irfan Zainudin confirmed to Petromindo.com the August 16 letter from the Aceh government. He said that PGE is currently studying the letter, adding that ownership composition can be changed to help accelerate the project.

PGE and PDPA signed an initial agreement last year to jointly develop geothermal resources in the Seulawah Agam working area, which has potentials to generate up to 165 MW of power. The government has assigned PGE to develop the working area.

This portal reported previously that in the first phase, the joint venture will carry out survey and exploration to develop the first power generation unit with a capacity of 55 MW and investment commitment of US$40 million.

The Seulawah Agam working area is located in Aceh Besar regency, spanning across several sub-districts, namely Seulimeum, Krueng Raya and Indrapuri. The project?s location is 50km southeast of Banda Aceh, the province?s capital.

Elsewhere, Irfan said that PGE in September will start the geology, geophysical, and geochemical survey in Seulawah Agam geothermal working area.

Editing by Reiner Simanjuntak