PLN talks with Unocal on geothermal deal

State electricity firm PT Perusahaan Listrik Negara (PLN) said it was optimistic about reaching a deal with Unocal Corp on Sarulla geothermal power project in North Sumatra, Reuters reported Friday.

PLN has said it sought additional power in Jawa and Sumatra to meet growing electricity demand.

"We are negotiating with Unocal on all aspects, including electricity prices from the Sarulla geothermal project," PLN president director Eddie Widiono told reporters.

PLN and Unocal reached agreement on a revised power purchase deal from the 165 megawatt Salak geothermal plant in West Java earlier this month at a price of 4.45 cents per kilowatt hour and a contract period until 2040. The previous contract was set at around 8.4 cents per kilowatt hour.

"I am optimistic that we can reach a deal on Sarulla with Unocal, because we need more electricity supply for the Sumatra area from this year," Widiono said.

The Sarulla geothermal project was postponed by the Indonesian government in 1998 following the Asian financial crisis.

Unocal can build a plant with about 390 megawatts of electricity from Sarulla geothermal.

Power demand in Indonesia is currently estimated to be growing by around 10 percent annually, one of the most robust markets in Southeast Asia. (*)