The signing confirmed the agreement on terms for amendments to the energy sales contract (ESC), with the concession holder PT Pertamina Geothermal Energy (PGE), a wholly owned subsidiary of the Indonesian state-owned oil and gas company Pertamina, signing as witness.
The ESC was executed in December 2007 for the 330MW net power Sarulla Geothermal Project, Ormat said.
The parties have agreed to change the price of the power sold under the ESC to a levelized payment of $6.79 cents/kWh, whereby the tariff payable in the early years after commercial operation date shall be higher and shall be reduced in the later years.
The parties have as well agreed on a 90 days schedule for resolving certain other contractual amendments for facilitation of project financing and for signing the resulting amended ESC.
The modified tariff itself is subject to verification by the state audit agency for development and approval from the minister of energy and mineral resources.
The project, located in Tapanuli Utara district, North Sumatra province in Indonesia, represents a single-contract geothermal power project to date, and is a reflection of the productivity and potential of Indonesian geothermal resources.
The Consortium members will be own and operate the project under the framework of a joint operating contract with the concession holder PGE. The project will be constructed in three phases, with each phase utilizing Ormat’s 110MW to 120MW -combined cycle geothermal plants in which the steam produces power in a backpressure steam turbine and is subsequently condensed in vaporizers of Ormat energy converters.
The separated brine from the wells will not be wasted, but will produce additional power by means of supplemental OECs. Construction is expected to be completed within the next five years, Ormat said.
The first phase is scheduled to commence operation within 30 months of financial close, which is expected one year after signature of the ESC, although the Consortium shall endeavor to accelerate the commissioning of part of the first phase. The remaining two phases are scheduled to commence operation in stages within 18 months after the first phase’s scheduled commissioning.
The total project cost is expected to be approximately $1bn, including drilling of wells, power plants, surface facilities for collecting and disposing of the steam and hot water and infrastructure.
Lucien Bronicki, chairman and chief technology officer of Ormat, said: “The Sarulla Project is an important landmark for Ormat as it will use Ormat’s Geothermal Combined Cycle technology, which is especially valuable for optimizing Indonesia’s very large but varied geothermal resources.
“Ormat’s air-cooled geothermal Combined Cycle technology, well proven over the last 18 years in the US and New Zealand, is particularly suited to assure maximum utilization of the Sarulla resource in a sustainable manner.”
