UNOCAL AGREES TO DEVELOP GEOTHERMAL RESOURCES IN NORTHWEST SUMATRA
Unocal North Sumatra Geothermal Ltd. has signed an agreement with Indonesia's Pertamina to appraise and develop geothermal resources in the Sarulla contract area of Northwest Sumatra.
The Unocal Corp. subsidiary also signed an electrical power sales agreement with Pertamina and PLN, the state owned power company, to generate as much as 1 million kw of electricity from geothermal steam and deliver the power to PLN's transmission system.
Unocal, as contractor to Pertamina, will be responsible for all aspects of development, including well drilling, steam production, and power plant financing, construction, and operation.
The 42 year agreements include time for exploration and development of reserves. Unocal agreed to produce and supply steam for 30 years to power plants that will be built as reserves are proved up. At the end of the finance period for each power plant, ownership of the plant will be transferred to PLN.
"This has the potential to become one of the most significant energy resources in Unocal's portfolio," said John F. Imle Jr., president of Unocal's energy resources division. "The Sarulla block contains some of the best geothermal prospects we have found worldwide" he said.
Imle also noted that geothermal energy is a core business for Unocal, and the Sarulla project could significantly enhance the company's position as the world's largest developer of geothermal energy.
In fine tuning its operations, the company late last year agreed to sell its Imperial Valley, Calif., geothermal assets to Magma Power Co., San Diego, for $225 million plus working capital (OGJ, Dec. 21, 1992, p. 27).
Unocal will conduct exploration to delineate Sarulla resources for an initial 110,000 kw power plant, which could be on line in 5-6 years. Other production facilities and power plants would follow.
The Sarulla contract area is about 39 miles long and 10 miles wide, covering about 240,000 acres. It lies near Lake Toba, about 300 miles south of Medan, Sumatra's most populous city.
PLN has a power grid near the block.
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