Panax, Bakrie Power finalize Indonesia geothermal development deal
Monday, August 16 2010 - 07:27 AM WIB
The new agreement replaces the previous MoU between Panax and Bakrie as announced in June 2010, the company said in a statement.
The joint venture will initially focus on the development of existing geothermal resources of the Sokoria project located on the Island of Flores, East Nusa Tenggara province for the development of a 30 MW geothermal power plant.
Bakrie won a tender in September 2009 to develop a 30 MW of power generation at the Sokoria geothermal field at an electricity tariff of US$12.5 cent per kWh, excluding applicable carbon credits. Panax will have a 45% working interest in the project.
Besides Sokoria project, the Joint Venture will also focus on the direct supply of approximately 25 MW of base-load geothermal power from existing geothermal resources to PT Dairi Prima Mineral (DPM)?s planned underground zinc/lead mine in North Sumatra.
Panax and Bakrie have also completed a ?binding terms sheet agreement? with DPM for the supply of up to 25 MW of geothermal power for DPM mine in North Sumatra . Panax will have a 51% working interest in the project.
DPM is unit of Indonesia-listed firm PT Bumi Resources Tbk.
Under the terms of the agreement, the electricity tariff in the first eight years of the agreement will be US$15 cent per kW/h and $12.5 cent per kWh for the remainder of the term of the agreement. In addition to this, Panax and Bakrie will be entitled to receive 50% of all carbon credits generated from the project.
Panax and Bakrie also have the right to provide additional geothermal power to PTDPM to meet future mine expansions. First production from the DPM mine is expected to occur in late 2012.
The joint venture also covers geothermal project areas that have already been awarded to Bakrie: geothermal areas that Bakrie has already tendered for in Indonesia and additional geothermal areas that Panax and Bakrie will jointly identify as suitable for geothermal development. (denny)