Unocal to press ahead with RI plant

Unocal to press ahead with RI plant

SINGAPORE (Reuter): Unocal Corp. said yesterday it would press ahead with pre-development work on its 1,000 megawatt (MW) Sarulla power project in Indonesia, which the government said would be delayed.

"We plan to move along with it. As soon as the government is ready to go, we will move ahead," a Unocal spokeswoman said.

Earlier on Tuesday, the Indonesian government listed 13 projects with more than 3,000 MW of production capacity that would be delayed to help ease government expenses.

Last week, Finance Minister Mar'ie Muhammad said the government was planning to postpone major infrastructure projects.

President Soeharto issued a decree yesterday listing US$37 billion in projects for postponement or review. Other projects worth $22 billion would go ahead.

Included in the postponement list was Unocal's $570 million project, in which the U.S. company has a 90 percent stake. Indonesian partner PT Parama Geopower has the remaining 10 percent.

But its 330 MW $600 million Salak power project was unaffected by the government announcement. Two power units are already installed and operated by Indonesian state electricity company PLN.

A third is scheduled for start up next year and two more units will follow, the spokeswoman said.

She said predevelopment work at Sarulla would continue to prepare the project for construction once the government was ready to go ahead.

"We will continue with that. This is not going to stop us. There will not be any change in the short term," she said.

"We will keep cooperating with the government as best we can, while retaining the value of the project. We would not want it to be delayed for too long."

Before Jakarta announced the list, Unocal President John Imle said the company was seeking a meeting with the Indonesian government to clarify the project's position.

"They have a lot of people to talk to and this is just one project," Imle told Reuters in an interview on the sidelines of an oil conference.

Unocal's predevelopment work involves drilling geothermal wells in the Sarulla exploration block, processing bids from companies to build the plant and the acquisition of land.

Construction work on the power plant was originally scheduled to start in 1998 and be completed by 2000.