Indonesia PLN, Unocal bicker over geothermal price
Wednesday, February 19 2003 - 05:19 PM WIB
PLN president director Eddie Widiono told parliament the price Unocal was offering to supply power from the Sarulla plant on North Sumatra was still way too high.
"At the moment, the developer (Unocal) is still offering 6.1 cents per kilowatt hour... This price is still high compared with other geothermal power projects," Widiono told parliament.
"We almost seem to be facing stalemate on this Sarulla project. We need a breakthrough for an agreement. We need to settle this Sarulla project this year," he added.
The project, postponed by the government in 1998 due to the Asian financial crisis, will provide an important alternative energy source for Indonesia, which is expected to face electricity shortages this year and next.
Unocal has proposed initially to build a 110 megawatt plant at a cost of $250 million but could eventually expanded the output to 390 megawatts.
Power demand in Indonesia is currently estimated to be growing by around 10 percent annually, making it one of the most robust markets in Southeast Asia.
A source at Unocal, who did not wish to be identified, said the company would be willing to drop its price if certain conditions were met.
"The cost for Sarulla project is high but Unocal seems to be ready to give a lower price, far below six cents per kilowatt hour. But Unocal needs certain conditions to be met," the source said.
"For this project Unocal needs something like a guarantee," he added without elaborating.(*)