ARKANSAS, Sept 9 (Future Headlines)- The global energy landscape is witnessing a significant shift towards sustainable and renewable sources. In this context, Pertamina Geothermal Energy (PGE), a subsidiary of the Indonesian state energy company Pertamina, is poised to make a transformative move by entering advanced negotiations to acquire PT Sorik Marapi Geothermal Power, a subsidiary of KS Orka Renewables. This strategic acquisition could be valued at up to $1 billion and marks a pivotal step towards Pertamina’s goal of doubling its geothermal capacity by 2027-2028. Geothermal energy, harnessed from the Earth’s internal heat, holds substantial promise in Indonesia, Southeast Asia’s largest economy, both for reducing energy imports and curbing carbon emissions.
If negotiations prove successful, the acquisition could be finalized before the close of the current year. However, it’s important to acknowledge that no agreement has been confirmed, and the outcome remains uncertain. Earlier this year, KS Orka, a geothermal developer, initiated the exploration of a potential sale of Sorik Marapi Geothermal Power. The move to divest this asset aligns with broader industry trends and opportunities.
Pertamina has set an ambitious target to double its geothermal capacity by 2027-2028. Achieving this goal is expected to require an estimated investment of $4 billion. As Southeast Asia’s largest economy, Indonesia is keen to leverage its geothermal resources. This approach serves dual purposes: reducing energy imports and addressing the imperative of carbon emissions reduction. Pertamina Geothermal Energy’s pursuit of PT Sorik Marapi Geothermal Power follows a period of remarkable growth. Notably, the company’s shares have surged by 33% since its domestic initial public offering (IPO) in February.
In a move that underscores Pertamina’s commitment to global geothermal expansion, the company recently signed preliminary agreements with two Kenyan firms. These agreements explore the potential for geothermal power projects with a combined estimated value of $2.2 billion. Pertamina’s international collaborations highlight the global commitment to renewable energy sources. Geothermal energy’s role in this transition is gaining prominence, offering sustainable alternatives to conventional fossil fuels.
- PT Sorik Marapi geothermal power: A key asset
Situated in Mandailing Natal Regency in North Sumatra, PT Sorik Marapi Geothermal Power is a substantial geothermal project with a capacity of up to 240 megawatts. Its size and potential make it a strategic asset in Indonesia’s renewable energy portfolio. KS Orka Renewables, the parent company of PT Sorik Marapi Geothermal Power, acquired a majority share in the company in mid-2016. While the exact financial details remain undisclosed, this acquisition underscores the value of geothermal assets.
- KS Orka renewables and China’s Kaishan group
KS Orka Renewables was established in 2016 with the backing of China’s Kaishan Group, a prominent compressor maker. The company’s primary focus is on geothermal new energy development. In addition to PT Sorik Marapi Geothermal Power, KS Orka Renewables is involved in various geothermal projects, including PT Sokoria Geothermal Indonesia in East Nusa Tenggara. These projects exemplify the company’s commitment to expanding geothermal energy across diverse regions.
Geothermal energy represents a clean, sustainable energy source derived from the Earth’s internal heat. Its use aligns with global efforts to transition away from fossil fuels and reduce greenhouse gas emissions. Geothermal energy is a crucial component of the global renewable energy mix. It has the potential to play a significant role in reducing carbon footprints and fostering energy independence. Pertamina’s international collaborations and partnerships with Kenyan firms highlight the global significance of geothermal energy as a key player in the transition to cleaner and more sustainable power sources. PT Sorik Marapi Geothermal Power, with its considerable capacity, becomes a pivotal asset in Indonesia’s renewable energy portfolio, contributing significantly to the nation’s renewable energy grid.
Moreover, this potential acquisition highlights the broader global context of geothermal energy. As the world grapples with the urgent need to address climate change, sustainable energy sources like geothermal power offer a path to reducing greenhouse gas emissions and achieving climate goals. Geothermal energy harnesses the Earth’s natural heat, making it a reliable and consistent source of clean electricity and heat. Pertamina’s vision for a sustainable energy future goes hand in hand with Indonesia’s commitment to carbon neutrality by 2070. To realize this goal, Indonesia is actively expanding the use of biofuels in its transport sector, advancing its ethanol blending targets, and exploring various avenues for clean energy development. The potential acquisition of PT Sorik Marapi Geothermal Power is a testament to Pertamina’s dedication to these objectives.
Writing by Kevin Wood; Editing by Sarah White