The Medco-Ormat-Itochu consortium has signed an agreement to construct the Sarulla geothermal project, located in Tapanuli Utara, north Sumatra, Indonesia. The plant will consist of three phases of 110MW to 120MW each, and will be constructed over the next five years.

The consortium is led by Indonesia’s Medco Energi Internasional and also includes the Ormat International unit of Ormat Technologies and the Itochu Corporation. The plant represents the largest single-contract geothermal project to date in the geothermal industry, and is a reflection of the large scale and potential of Indonesian geothermal resources.

The first power generating unit of the plant is scheduled to commence operation within 30 months of the financial closing, and the remainder is scheduled to commence operation over a period of 18 months following the first unit. The total project cost is estimated to be approximately $800 million and it is expected to have a total output of around 340MW.

The consortium will own and operate the facilities, and will sell electricity to Indonesia’s state-owned power company Perusahaan Listrik Negara (PLN) under a 30-year energy sales contract. Pertamina (Persero), Indonesia’s state-owned oil and gas firm, is the plant’s concession holder, through its Pertamina Geothermal Energy unit.

Akira Yokota, executive vice president of Itochu Corporation, said: Indonesia has quite rich geothermal resources and we are very glad to have achieved this valuable step in contributing to the further prosperity of Indonesia through Sarulla power project using such environmentally friendly resources which Indonesia owns.