Pertamina, PNOC sign geothermal pact

The Philippines PNOC-Energy Development Corp. Wednesday signed an agreement with Pertamina for a possible joint venture in the development of potential geothermal fields in Indonesia, Dow Jones Newswires reported.

The two state energy firms will conduct a technical evaluation and feasibility study on three identified geothermal areas in Indonesia, with a potential to generate as much as 1,200 megawatts of electricity.

Energy Secretary Vincent Perez said the agreement between Pertamina and PNOC-EDC resulted from a bilateral agreement between the Philippines and Indonesia last year.

"We identified several areas of cooperation, but geothermal development is really one area wherein the Philippines can help Indonesia, because we have both the experience and expertise to share," Perez said in a statement.

The Philippines is the world's second largest producer of geothermal energy and has been utilizing geothermal energy for power generation since the 1970s. PNOC-EDC operates 60 percent of the country's geothermal capacity.

Sergio Apostol, PNOC-EDC chairman and president, said his company's commitment is to submit a business plan to Pertamina by September, which will include development of a steam field and construction of a geothermal power plant.

He said PNOC-EDC and Pertamina will form a joint venture once the business plan is approved.

Areas to be studied are Tompaso in North Sulawesi, Ulebelu in Lampung and Lumut-Balai in South Sumatra. A team from PNOC-EDC will go to the sites to start their study next month.

Indonesia has an estimated 27,000 MW of geothermal potential, but only has an installed capacity of 785 MW using geothermal energy. (*)