FOURTH INDO PROJECT FOR PANAX GEOTHERMAL
24 May 2011,
PANAX Geothermal has signed an agreement with one of Indonesia’s largest companies to develop a 165 megawatt geothermal project in East Java.
It’s the second deal the company has negotiated in as many months and its fourth geothermal project in Indonesia.
Panax will JV with PT Bakrie Power to develop the Ngebal Geothermal Project, which will supply power to Indonesian state-owned company PT PLN.
Bakrie Power is part of the Bakrie Group, one of Indonesia’s largest companies. Under the terms of the agreement, Panax will earn 35 per cent working interest in the project before commercial development starts.
Panax managing director Kerry Parker (pictured) says the project has ‘enormous potential’.
“It’s a near-term development project in a strategic location that is underpinned by a guaranteed, commercially attractive power tariff with the potential to expand to more than 200 megawatts,” he says.
“This is a positive step forward in Panax’s plans to secure more projects in the Asia Pacific region and make the most of the guaranteed feed-in tariffs, abundant geothermal resources and renewable energy incentives on offer in Indonesia.
“Panax is committed to building a strong geothermal business in Indonesia. The company’s combined share of potential generating capacity in Indonesia now exceeds 160 megawatts.”
Parker says the agreement will strengthen Panax’s relationship with one of its major development partners – the third geothermal project the company will develop alongside Bakrie Power.
“Strong local partnerships are important for doing business in Indonesia and gaining government and community support,” says Parker.
“A significant amount of exploration work has already been carried out in the project area and Panax will fund the acquisition of existing data and reports. This information will assist in the ongoing development of the project, and is expected to provide significant savings in both time and money.”
Commercialisation is expected to start late next year.