Pertamina Geothermal Energy, GDC, and AGIL Agree on Accelerating 2 Geothermal Fields Development in Kenya
Nairobi, Kenya, March 8, 2024 - PT Pertamina Geothermal Energy Tbk (PGE) has reached an agreement with Kenyan geothermal developers, Geothermal Development Company Ltd. (GDC), and Africa Geothermal International Ltd. (AGIL), to accelerate geothermal fields development in the African country. Two geothermal fields exploration in Kenya, developed by PGE with its partners, is expected to commence in 2024.
During high-level discussions held at GDC's headquarters in Nairobi on Wednesday (6/3/2024), PGE and GDC discussed the support from the Kenyan Government in expediting the geothermal field development project in Suswa, a volcanic area located in Narok, Kenya. GDC is a geothermal developer owned by the Kenyan Government.
A delegation from PGE, led by President Director Julfi Hadi and accompanied by Director of Exploration and Development of PGE, Rachmat Hidajat, held meetings with GDC Chairman Hon. Walter Osebe Nyambati and Managing Director & Chief Executive Officer Paul Ngugi. During the visit to Nairobi, Julfi Hadi also led a PGE delegation in separate meetings with AGIL Directors Patrick Nyoike and Ephraim Maina.
According to the President Director of PGE, Julfi Hadi, the meetings in Nairobi are a follow-up to the initial agreements reached with GDC and AGIL in 2023. PGE and GDC signed a Non-Disclosure Agreement (NDA) on September 15, 2023, for geothermal potential development in Kenya and Indonesia. Earlier, on August 22, 2023, PGE and AGIL signed a Memorandum of Understanding (MoU) for the Longonot geothermal field development located in the Great Rift Valley region of Kenya.
One of the main agendas of the follow-up meeting with GDC was to discuss the initial technical studies conducted by PGE on the Suswa field, which is estimated to have a resource potential of 200 MW. However, further studies are needed to confirm the magnitude of this potential through exploration drilling.
Therefore, PGE and GDC have planned to sign a Joint Development Agreement (JDA) that will govern GDC's role in exploration at the first two wells through a government drilling scheme and the possibility of further exploration at three other wells to be conducted by PGE. "We target the implementation of the JDA by mid-2024, with GDC's drilling target by the end of 2024 or early 2025," said Julfi Hadi.
According to the Director of Exploration and Development of PGE, Rachmat Hidajat, after exploration drilling, a feasibility study will be conducted to secure a power purchase agreement with a viable tariff. "Acceleration needs to carefully consider all stages and various aspects to make the project's development clearer and more measurable," said Rachmat Hidajat.
The gradual development acceleration of the Suswa Field will involve four units of geothermal power plants, each with a capacity of 50 MW, with a target commercial operation date (COD) for unit 1 in 2027. The main target is to make the Suswa project a world-class geothermal field with a capacity of 500 MW.
Meanwhile, PGE and AGIL have also agreed on several technical aspects, including the establishment of a joint venture to develop the Longonot field. Moreover, PGE and AGIL have agreed to a power purchase agreement of 140 MW, and for the initial phase, PGE will conduct exploration drilling of 35 MW targeted to be on stream by 2027. "To accelerate the implementation of this agreement, the parties will sign a definitive agreement after obtaining internal corporate approvals," said Julfi Hadi.
The collaboration between PGE and its partners in the development of the Suswa and Longonot fields in Kenya marks PGE's steps toward becoming a global player in the geothermal sector and positions Kenya as a hub for PGE's geothermal development abroad as part of its contribution to achieving global Net Zero Emission (NZE). This collaborative effort receives complete backing from the Kenyan Government, facilitated by the Ministry of Energy and Mineral Resources of Kenya. Furthermore, it is supported by relevant stakeholders such as The Energy and Petroleum Regulatory Authority (EPRA), Kenya Power & Lighting Company (KPLC), and Ketraco, all actively participating in PGE and GDC meetings.
Vice President of Corporate Communication of Pertamina, Fadjar Djoko Santoso, said that international business development cooperation is part of Pertamina's Go Global spirit to support Pertamina's vision as a world-class energy company.
"International business expansion demonstrates Pertamina's increasing recognition globally. Pertamina has sufficient experience in managing geothermal energy and can be developed in foreign fields," said Fadjar.
Pertamina, as a leading company in the energy transition, is committed to supporting the Net Zero Emission 2060 target by continuously promoting programs that directly impact the Sustainable Development Goals (SDGs) achievement. All these efforts align with Environmental, Social, and Governance (ESG) implementation across all Pertamina's business lines and operations.**