Giant U.S. oil company to build geothermal plant

The Jakarta Post, Jakarta

ChevronTexaco Corp. the second largest U.S. energy firm, said it had decided to invest US$128 million in Indonesia to build a new geothermal power generating unit in West Java in a bid to avert future electricity shortages in Java, Madura and Bali.

ChevronTexaco said in a statement that the company's local unit, ChevronTexaco Energy Indonesia Ltd. (CTEI), would expand the Darajat geothermal power plant by building a new 110 megawatt unit in Darajat, Garut, West Java.

CTEI, which was formerly known as Amoseas Indonesia Inc., will have a 95 percent stake in the project, with the remaining 5 percent held by Darajat Geothermal Indonesia. Darajat is linked to the Tahija family.

"The new unit will help meet the electricity demands in Java, Madura and Bali, where supply shortages are anticipated," said George Kirkland, president ChevronTexaco Overseas Petroleum in the statement.

Geothermal resources in Darajat are abundant, clean, renewable and able to easily generate up to 330 megawatts of electrical power. CTEI has built two power units, Dradjat I and II, with a combined capacity of 145 megawatts, meaning more than half of the area's geothermal resources remained untapped.

CTEI signed a power sales contract with state utility PT Perusahaan Listrik Negara (PLN) and state oil and gas company PT Pertamina earlier this year for the development of the Darajat III plant.

In October this year, it awarded the engineering, procurement and construction (EPC) contract to the consortium consisting of PT Thiess Contractors Indonesia and Kanematsu Corp. Construction of the new power unit will be completed within two years and commercial operations are expected to begin by the third quarter of 2006.

The new power unit is expected to be in operation for 30 years.

"Tradable United Nation's Clean Development Mechanism credits generated by the project for Co2 emission reduction are to be pursued for approval by appropriate Indonesian and international authorities and could contribute significantly to the project's economic viability, which is a significant factor in the approval of the project," Wahyudin Yudiana, president director of ChevronTexaco Indonesia's Business Unit, said.