Medco hopes to conclude Sarulla renegotiation Oct

Geothermal unit of IDX-listed energy firm PT Medco Energi International said that operations of Sarulla power plant in North Sumatra will be delayed again to at least 2012 due to prolonged price renegotiation between developer and state electricity firm PLN.

Encep Sutisna VP General Support and External Relations PT of Medco Geothermal Sarulla was quoted by Kompas.Com as saying on Tuesday that he hoped renegotiation could be completed in October this year, after the formation of the new cabinet.

Medco is a consortium member of Sarulla Operation Limited, along with Itochu Corp. Kyushu Electric and Ormat Technologies.

The consortium plans to develop 3x110MW power plant in Sarulla. Initially price was set at 4.6 US cents per Kwh, but developer later asked for renegotiation and demanded electricity price to be raised to 7 cents.

?After renegotiation is completed consortium could secure financial closing from creditors and start construction immediately afterward,? he said, adding that the fisrt unit would become operations in 30 months.(*)