US$5 billion contracts signed during geothermal congress

Twelve geothermal contracts worth around US$ 5 billion were signed on Monday to mark the opening of the World Geothermal Congress 2010 in Nusa Dua, Bali.

"The 12 geothermal projects are part of the Phase Two fast track electricity program," Coordinating Minister for Economy Hatta Rajasa told the congress participants.

The contracts include the cooperation agreement between state-owned electricity firm PT Perusahaan Listrik Negara (PLN) and PT Pertamina Geothermal Energy (PGE), a geothermal unit of state oil and gas company PT Pertamina, to develop four geothermal power plants.

The four projects are: the Unit IV (1x20 MW) of the Lahendong power plant in North Sulawesi; the Unit I to IV (4x 20 MW) of the Kotamobagu power plant also in North Sulawesi, the Unit I and II (2x55 MW) of the Hululais power plant in Bengkulu, and the Unit I and II (2x55 MW) of the Sungai Penuh power plants in Jambi.

"The four projects require a total investment of around US$541 million," PGE's president director Abadi Poernomo said.

PLN will buy steam from PGE for 4.3 US cents per kilowatt hour (kWh). "The price will be escalated by two percent every year," PLN's technology and planning director Nasri Sebayang said.

Also signed during the event was a US$40 million worth drilling contract between geothermal producer Star Energy Geothermal Wayang Windu and drilling company PT Resources Jaya Teknik Management Indonesia (RMI). Under the contract, RMI will carry out drilling activity at Star Energy's Wayang Windu Geothermal field in Pengalengan, West Java.

"The contract will last for two years," RMI's president director Rohmad Hadiwijoyo said.

Also on Monday, four regional governments awarded rights to develop geothermal fields and power plants to PT Golden Spike Indonesia, PT Supreme Energy, PT Sokoria Geothermal Indonesia.

Golden Spike won tender to develop a goethermal power plant in Ungaran Mountain in Central Java, while Sokoria was appointed to develop a similar project in Ende, East Nusa Tenggara. Supreme Energy was selected to develop two similar projects in Rajabasa Mountain in Lampung and Solok, West Sumatera and Solok, West Sumatera.

The four projects are estimated to need a total investment of $1.68 billion. Herman Darnel Ibrahim, chairman of the congress? organizing committee, said, adding the signing of the multi-bilion dollar-worth projects were expected to attract more investors to develop Indonesia?s abundant geothermal resources. (*)