Indonesia power plant delay expected, says Unacol
Indonesia power plant delay expected, says Unacol
SINGAPORE (Reuter): Unocal Corp. said yesterday Indonesia's decision to postpone its power plant project in northern Sumatra was not unexpected and it understands that the government needed to do so to stabilize the economy.
"This is not altogether a surprise to us, it's not unexpected," Carol Scott, Unocal's spokeswoman told Reuters in Singapore.
"Our project is just one of a number (that is postponed). We understand that the government needs to do what it has to do to stabilize the currency and we will weather this storm."
She said a meeting has been scheduled with the government on the matter.
According to newspaper reports, among the 14 power projects being postponed are the one by Unocal and another by a unit of U.S. power company Enron Corp.
Scott said Unocal North Sumatra Geothermal, its Indonesian subsidiary, will continue with its pre-development work on the $570-million project in Sarulla near Medan.
The pre-development phase involves drilling geothermal wells in the Sarulla block, processing bids from companies to build the plant and the acquisition of land.
Unocal operates the geothermal well and holds 90 percent in the 240,000-acre project, with local firm PT Parama Geopower holding the rest. The companies have a contract with state-owned Pertamina to develop geothermal resources at Sarulla.
"There won't be any change on the short term, we'll just continually assess the situation and see how it will affect the long term but we will proceed with the pre-development work short of making any long-term commitment," Scott said.
"We will try to get everything ready to go and just as soon as the government is ready to move ahead with the project we will be ready to proceed."
Construction work on the power plant was due to start in 1998 and was scheduled for completion in the year 2000.
The American-owned company also has a power sales agreement with state-owned utility Perusahaan Listrik Negara (PLN) and Pertamina to generate and deliver up to 1,000 megawatts of electricity daily from Sarulla.