Medco cons. urges govt to officially transfer Sarulla ownership status

Sarulla Operation Limited (SOL), a consortium consisting of Medco Energy International, Ormat Technologies, Itochu Corporation, and Kyushu International Corporation have asked the government to transfer the ownership of the geothermal concession area in Sarulla from Pertamina Geothermal Energy (PGE) to the consortium in order to enable it to resume the geothermal project.

Fazil E. Alfitri, the president of PT Medco Power Indonesia, said in Jakarta on Wednesday that without the transfer of the ownership of the concession area to the consortium it would be difficult to resume the Sarulla geothermal power plant project which has been delayed for years due to among others, the lack of the clarity in the status of the conession area.

He said that the Sarulla geothermal concession area was regulated under the old mining regulation underwhich the concession area is controlled by the government through Pertamina Geothermal Energy.

Fazil said that the development of the Sarulla geothermal project should be adjusted to the new regulation to ensure that the consortium would be able to control the ownership of the Sarulla concession area.

Fazil said that it would be impossible for the consortium to continue the project without the formal change in the ownership status of the geothermal concession. Medco and other members of the consortium plan to build a geothermal power plant with a capacity of 3 x 110 megawatt with investment of up to US$1.4 billion. The consortium expects to obtain loans from Japan Bank for International Cooperation (JBIC) to partly finance the project.

State owned electricity company PLN has said that it would take over the Sarulla geothermal project if the consortium showed no goodwill to continue the project. (*)