Medco still committed to develop Sarulla geothermal project

Indonesia-listed energy firm PT Medco Energi Internasional said it was still committed to develop the 3x110 MW Sarulla geothermal project in North Sumatra together with its partners including Ormat Technologies, Itochu Corporation, and Kyuden International Corp. (Kyushu)

Medco President Director Lukman Mahfoedz said in a press statement on Sunday that the project has obtained funding commitment worth US$1 billion from Japan Bank for International Cooperation and Asian Development Bank.

State electricity monopoly PT Perusahaan Listrik Negara (PLN) has earlier said it wanted to take over the project.

The consortium has obtained approval from the Ministry of Energy and Mineral Resources to sell the electricity from the project at a price of 6.79 US cents per kWh. Medco said that the company was currently in final negotiation over two key necessary contracts: the joint operating contract with PT Pertamina Geothermal Energy, and energy sales contract with PLN, both of which are expected to be completed at the end of June 2011.

Medco expects the first 1x110 MW power plant can begin commercial operation in 2014, and the second in 2015, followed by the third unit in 2016. (godang)