PT Pertamina Geothermal Energy Tbk (PGE) has reached an agreement with Kenya’s geothermal development companies, Geothermal Development Company Ltd. (GDC), and Africa Geothermal International Ltd. (AGIL), to expedite the development of geothermal fields in the African nation. Exploration of two geothermal fields in Kenya, developed by PGE along with its partners, is expected to commence in 2024.
In high-level discussions held at GDC’s headquarters in Nairobi on Wednesday (3/6/2024), PGE and GDC discussed the support from the Kenyan government in accelerating the geothermal field development project in Suswa, a volcanic area located in Narok, Kenya. GDC is a government-owned geothermal developer in Kenya.
The PGE delegation, led by President Director Julfi Hadi and accompanied by PGE’s Director of Exploration and Development Rachmat Hidajat, met with GDC Chairman Hon. Walter Osebe Nyambati and Managing Director & Chief Executive Officer Paul Ngugi. During the visit to Nairobi, Julfi Hadi also led the PGE delegation in a separate meeting with AGIL Directors Patrick Nyoike and Ephraim Maina.
According to PGE President Director Julfi Hadi, the meeting in Nairobi is a follow-up to the initial agreement reached with GDC and AGIL in 2023. PGE and GDC signed a Non-Disclosure Agreement (NDA) on September 15, 2023, for the development of geothermal potential in Kenya and Indonesia. Earlier, on August 22, 2023, PGE and AGIL signed a Memorandum of Understanding (MoU) for the development of the Longonot geothermal field located in the Great Rift Valley region of Kenya.
One of the main agendas of the continued meeting with GDC was to discuss the initial technical studies 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 extent of this potential through exploration drilling.
Therefore, PGE and GDC have planned to sign a Joint Development Agreement (JDA) that will regulate GDC’s role in the exploration of the first 2 wells through the government drilling scheme and the possibility of further exploration on three other wells to be conducted by PGE. “We aim to implement the JDA by mid-2024, with GDC’s drilling target set for the end of 2024 or early 2025,” said Julfi Hadi.
According to PGE’s Director of Exploration and Development Rachmat Hidajat, after exploration drilling, a feasibility study will be conducted to obtain a power purchase agreement with a viable tariff. “Acceleration needs to carefully consider all stages and various aspects to ensure the project’s development becomes clearer and more measurable,” said Rachmat Hidajat.
The phased development acceleration of the Suswa Field includes 4 geothermal power plants, each with a capacity of 50 MW, with the target commercial operation date (COD) of 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 preparation of a joint venture to develop the Longonot field. In addition, PGE and AGIL have agreed on a power purchase agreement for 140 MW, and for the initial stage, PGE will conduct exploration drilling for 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 step towards becoming a global player in the geothermal sector and positions Kenya as PGE’s geothermal development hub overseas as part of its contribution towards Global Net Zero Emission (NZE) goals. This collaboration is fully supported by the Kenyan government through the presence of the Ministry of Energy and Mineral Resources of Kenya and will be supported by relevant stakeholders, including The Energy and Petroleum Regulatory Authority (EPRA), Kenya Power & Lighting Company (KPLC), and Ketraco, in PGE and GDC meetings.
Pertamina Vice President of Corporate Communication, Fadjar Djoko Santoso, said that international business development cooperation is part of Pertamina’s Go Global spirit to support its vision as a world-class energy company.
“International business expansion demonstrates Pertamina’s increasing recognition worldwide. Pertamina has sufficient experience in managing geothermal energy and can be developed in foreign fields,” said Fadjar.
As a leading company in the energy transition, Pertamina is committed to supporting the Net Zero Emission 2060 target by continuously promoting programs that directly contribute to achieving the Sustainable Development Goals (SDGs). All of these efforts are in line with the implementation of Environmental, Social & Governance (ESG) across all Pertamina business lines and operations.
