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Friday March 23, 2012

GE and Sabah firm said to be close to RM750mil geothermal plant deal

3 in green energy talks 1MDB

PETALING JAYA: 1Malaysia Development Bhd (1MDB) and General Electric (GE) are among three companies currently in talks to develop the country's first geothermal plant in Apas, Tawau.

The third company in the venture, tagged at between RM750mil and RM800mil, is a Sabah-based green energy company which has inked a power purchase agreement with Sabah Electricity Sdn Bhd.

Sources familiar with the project told StarBiz that the companies were in the final stage of negotiations and expected to reach a joint agreement soon, possibly end of the month.

The renewable energy plant, when fully completed, can generate a total capacity of 67MW, supplying electricity to Tawau's population of 398,000.

The emission-free geothermal plant will tap natural hot fluids from the ground for steam production to drive the steam turbine generator; it will generate 36MW under phase one and an additional 31MW under phase two.

When contacted, a 1MDB spokesperson said the company did not comment on speculation.

Following 1MDB's recent acquisition of Tanjong Energy Holdings Sdn Bhd, CEO Shahrol Halmi had said it “signals the first step towards fulfilling the shareholder's aspiration for a more holistic eco-system to drive long-term energy security”.

According to the sources, GE will provide technical know-how, global expertise, equipment and technology.

GE is currently involved in Indonesia's biggest geothermal power plant, the Wayang Windu power plant, which taps into naturally occurring underground pockets of steam and hot water with wells as deep as three km.

In March 2011, Deputy Natural Resources and Environment Minister Tan Sri Joseph Kurup revealed that studies regarding the electricity generation potential of up to 67MW from geothermal resources discovered at a geothermal site in Apas had been completed.

Although a study by the Mineral and Geosciences Department was not a detailed one, the technical aspects indicated that the geothermal site in Apas had the potential to generate enough electricity to cater for the needs of the Tawau people.

The study also found a reservoir about 2,000m to 3,000m below the earth's surface with water at temperatures of 220-236 degrees Celsius. This heat was more than sufficient to generate electricity, Kurup had said after visiting the site.

On Tuesday, Prime Minister Datuk Seri Najib Tun Razak said: “Malaysia's embracing of green technology is not only to conserve and preserve its resources, but is also envisaged to act as a new economic impetus for the country.”

The Prime Minister said the renewable energy target under the 10th Malaysia Plan was 5.5% of the total capacity mix in 2015 or 985MW of generating capacity, from less than 1% previously.

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