Pertamina aims to boost geothermal capacity

Pertamina aims to boost geothermal capacity

Fitri Wulandari, Jakarta

State-owned oil and gas company PT Pertamina plans to boost
the capacity of its geothermal fields within the next six years
as the commodity will become an important source of energy in the
future amid higher fuel prices and depleting oil reserves.

Sukusen Soemardi, a general manager at Pertamina, said the
geothermal field capacity would be increased from the current 162
megawatts (MW) to 930 MW in 2010. Proven reserves would be raised
from 344 MW to 1,644 MW in 2010.

"Geothermal contribution to Pertamina's revenue has been
increasingly significant. It has good prospects in the future,"
Sukusen told reporters in a discussion on geothermal energy over
the weekend.

He explained that to achieve the expansion target, Pertamina
would both develop new geothermal working areas and acquire
geothermal projects.

Geothermal energy -- pressurized steam -- is produced when
descending groundwater from the earth's surface meets the molten
magma ascending from the earth's core in exceptionally hot
surroundings. It is deemed an environmentally clean energy
source, with a carbon dioxide emission rate 90 percent lower than
that oil-fired power plants.

The steam can be used directly, for example, in mushroom
farming or in producing dairy products. Indirect use would be the
use of the steam to move turbines in power plants to produce
electricity.

Pertamina which is the main player in the geothermal business
here, operates 15 geothermal working areas with eight areas
operated jointly with other companies, including Amoseas, PT Bali
Energi, PT Geo Dipa and Unocal.

This year, Pertamina will expand the capacity of three
geothermal fields -- Kamojang Field, in West Java, Lahendong in
North Sulawesi and Sibayak in North Sumatra.

The Kamojang field capacity will be raised from 140 MW to 200
MW. Lahendong will be raised to 60 MW from the current 20 MW,
while Sibayak will have an additional capacity of 10 MW from the
current 2 MW.

The company is carrying out exploration work in Lumutbalai,
South Sumatra and Ulubelu, Lampung, which have estimated reserves
of 600 MW and 400MW, respectively.

Sukusen said Pertamina is still negotiating with state-owned
electricity firm PT Perusahaan Listrik Negara (PLN) on steam
sales as PLN plans to build geothermal power plants.

Sukusen said electricity from Lumutbalai and Ulubelu is
expected to be on stream between 2007-2008.

The company is also in the process of negotiating with
Deutsche Band and Credit First Suisse Boston (CFSB) to acquire
the Wayang Windu Geothermal field in West Java which is estimated
to have reserves of around 300 MW.

For developing future projects, Pertamina would seek
partnership with other energy companies to share risks.

Sukusen said geothermal energy promises a lucrative future as
oil reserves had been depleting and the price of oil-based fuel
was becoming more expensive in line with the government's
decision to scrap the fuel subsidy.

Indonesia has total proven geothermal reserves of 9,100 MW,
which is equal to around 4.2 billion barrels of oil reserves. A
geothermal power plant with a capacity of 1,000 MW is equal to
460 million barrels of oil and could produce electricity for 30
years.

As a comparison, the country's proven oil reserves are
estimated at five billion barrels and are predicted to dry up
within 10 years with an annual production rate of between 400
million to 500 million.

Indonesia currently has a number of geothermal power plants
with a combined capacity of 807 MW.

The new geothermal law is expected to attract more investors
to develop the sector.