Pertamina to buy Wayang Windu geothermal power plant for $200 million
Friday, December 19 2003 - 02:12 AM WIB
Pertamina is planning to finalize the deal by end of this year.
The price assessment of this expensive project was already done by independent consultants like people from Bandung Institute of Technology (ITB). The consultants said the project?s value is in between $200 million to $250 million, Pertamina?s upstream director Bambang Nugroho said in Jakarta on Thursday.
?ITB?s consultants put the Wayang Windu project?s value is $240 million, whereas other consultants said it is worth for around $260 million. Therefore, Pertamina wants the $200 million-$250 million level,? Bambang said.
But however, Pertamina will negotiate for less than $200 million. ?According to Pertamina, This price will be the best for Wayang Windu project, ? he said.
Bambang admitted that Pertamina would be very careful in buying this project. The negotiations have not completed so far though the initial purchase agreement was signed in May.
Earlier, it was reported that Pertamina had delayed its plan to purchase Wayang Windu project in West Java.
Pertamina has asked for the legal opinion on the take over plan whether it will violate the company?s rules, particularly article 3 which states that it can handle only its own geothermal project or it can purchase a new plant which is almost finished, company?s finance director Alfred H. Rohimone said in Jakarta.
?The question is whether the purchase of Wayang Windu project is in line with that article (3) or not. Because Pertamina?s business must comply with the company regulations,? Alfred told Koran Tempo recently.
He said that Pertamina?s board of directors had already asked the office of the state minister for state enterprises for the legal opinion about purchase plan.
?Until today, we?re still waiting,? Alfred said.
In October, Pertamina?s president director Ariffi Nawawi said his company would review its plan to take over Wayang Windu project
The company?s move goes in line with its determination to focus on its core businesses, Ariffi said at that time.
Pertamina had planned to buy the Wayang Windu with funds from the $500 bonds the company planned to issue this year.
Developer Magma Nusantara currently owns the Wayang Windu plant, which is located in West Java?s Pengalengan district. Magma is a joint venture of U.S. oil and gas firm Unocal Corporation and a consortium of two banks namely Deutsche Bank and Credit Suisse First Boston.
Construction of the power project, planned to have capacity to generate 2x110 megawatts of electricity, started in 1997. It was halted in 1998 due to financial crisis. (*)