PLN to acquire 50% PGE

State owned utility company PT Perusahaan Listrik Negara (PLN) is in talks with PT Pertamina to acquire a 50% stake in the state owned oil and gas firm?s subsidiary, PT Pertamina Geothermal Energy (PGE), Investor Daily reported.

Negotiations between the two state companies have been underway to turn PGE into a joint ownership, said State Enterprises Minister Dahlan Iskan as reported by Investor Daily, to help ease the geothermal supply issue for the PLN. ?They have been in talks to split PGE?s ownership with a 50:50 composition,? he said Tuesday after a meeting with management and commissioner boards of SOEs.

Dahlan added that the idea of the joint ownership surfaced after the two firms struggled to reach a deal on the supply of geothermal to PLN due to pricing issue. ?All these times, the two parties had not been able to strike a deal on the Power Purchase Agreement for the geothermal. Therefore, they came up with the idea of making PGE a joint business.?

At present, PGE manages 15 geothermal working areas and solely operates nine of them. Among the nine projects are Sibayak, a power plant project located in North Sumatra with an installed capacity of 12 MW, Sungai Penuh in Jambi (55 MW), Lumut Balai in South Sumatra (2x55 MW), Hululais in Bengkulu (2x55 MW) and Kotamobagu in North Sulawesi (2x20 MW). (*)