Gunung Salak Geothermal Power Plant

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The 165-MW (3x55-MW), $434 million, Gunung Salak Geothermal Power Plant was being developed by Unocal affiliate PT Dayabumi Salak Pratama (50%) and PT Nusamba Geothermal (50%). The project is located near the Awinbengkok geothermal field in West Java and involves the addition of a fourth, fifth, and sixth turbine to an existing plant operated by the national utility, Perushaan Listrik Negara (PLN). PLN installed units 1 and 2 in the mid-1980s and is developing a third unit at the site. Steam for PLN's 3x55-MW turbines is being provided from a joint venture between Unocal and Pertamina, the state oil company. Unocal will continue to sell geothermal steam for 30 years. Project construction commenced in August 1995; the target completion date is set for 1998. Financial closure was reached in August/September 1996. Financing has been sourced from a mixture of syndicated loans, 144A bonds issued by Unocal, and sponsor equity. To support the bond issue, Unocal, the primary project contractor, has provided a completion guarantee. A 30-year power purchase agreement was signed with PLN in 1995. The government put on hold many of the independent power producer (IPP) projects in late 1997 as part of the retrenchment program to cope with the economic crisis. PLN, which was financially troubled by the crisis, asked to renegotiate the PPAs, especially with regards the price. In 2003, 14 of the 26 IPPs, including Salak, agreed to continue their projects under a new pricing scheme, while seven agreed to terminate the PPAs. The government and PLN each agreed to take over two projects. In August 2005, Chevron acquired Unocal Corporation. The aggregate purchase price was $17.3 billion, which included $7.5 billion cash, approximately 169 million shares of Chevron common stock valued at $9.6 billion, and $0.2 billion for stock options on approximately 5 million shares and merger-related fees. As a result, the 50% ownership in Salak Geothermal Plant was transferred to Chevron. In 2009 the project received a haul over, and its turbines were upgraded from 3x55MW to 3x60MW, bringing total nameplate capacity to 180MW. The upgrade was done by: changing turbine diaphragm of unit 1 and 2, and, modifying the gas extraction system or ejector for unit 3.