Medco Cahaya to drill two geothermal wells in December in E. Java
Monday, October 2 2017 - 02:33 AM WIB
Geothermal power company PT Medco Cahaya Geothermal, a subsidiary of PT Medco Power Indonesia (MPI), plans to drill two additional geothermal wells later this year at its Blawan-Ijen geothermal working area, which spans three regencies of East Java Province including Bondowoso, Banyuwangi, and Situbondo.
?In December of this year, there?s a plan to drill two more wells. We previously drilled two wells (slim hole). Two additional wells are being prepared for production wells,? said MPI President Director Fazil Al Fitri to Petromindo.com over the weekend.
He said that the company has allocated US$40 million to finance the drilling of the four wells as it seeks to develop a 110 MW geothermal power plant. Once the drilling of the two additional wells have been completed, Medco Cahaya will drill two more wells, he said.
The total investment requirement for the planned geothermal power plant is estimated at $400 million, of which 30 percent will come from internal funds, while the remainder from loans, Fazil said.
As has been previously reported, Minister of Energy and Mineral Resources Ignasius Jonan has recently approved a request made by Medco Cahaya for a second extension of its exploration period at the Blawan-Ijen geothermal working area.
The second extension of the exploration period is valid from May 25, 2017 through May 24, 2018, the statement said.
Medco Cahaya first obtained the geothermal concession in 2011 through an East Java gubernatorial decree, which was later adjusted to Minister of Energy and Mineral Resources geothermal permit in April 2015.
The company last year obtained the first extension of the exploration period, which was valid until May 24, 2017. In accordance with Law No 21/2104 on geothermal, exploration period is given for a maximum of five years, and can be extended twice, each for a year, including for feasibility study.
Medco Cahaya is developing the Blawan-Ijen geothermal working area, with a potential to produce 110 MW of electricity. The power plant is targeted to start operation in 2020 or 2021, the ministry said in the statement. The company in 2013 signed a 30-year power purchase agreement with state-owned electricity firm PT PLN.
Editing by Reiner Simanjuntak