A Brief History of the

Sarulla Geothermal Field

Development
by Novi Ganefianto1, Paul von Hirtz2, Elisabeth Easley1
1
PT. Thermochem Indonesia; 2 Thermochem, Inc.

The Sarulla Geothermal Field is located in the Early Exploration

Tapanuli Utara District, North Sumatra province, The first systematic exploration studies of the
Indonesia (see Figure 1). The Sarulla Operation Sarulla geothermal field were conducted during
Limited (SOL), a consortium of Medco-Itochu- the second half of the 1980s by PERTAMINA.
Kyushu-Ormat, has been granted the rights to The company was appointed by the Indonesian
utilize the Sarulla geothermal resource for power Government by Presidential Decree 22 of 1981, to
generation under the framework of a Joint Operating have the right to conduct surveys, exploration, and
Contract (JOC) with PERTAMINA. Construction exploitation of geothermal energy in Indonesia.
and development wells drilling for the 330 MW PERTAMINA geothermal group began their
geothermal power development are currently activities in 1987 with the reconnaissance and
underway, scheduled to be fully completed in 2019. exploration of prospects in Sumatra, and recognized
The authors work for the well testing contractor, the broad Sarulla area as one of the several attractive
PT. Thermochem Indonesia and Thermochem, Inc. prospects for geothermal development.
(USA). A subsidiary of Unocal, together with
The development PERTAMINA, undertook follow-up geochemical
of this large resource surveys in Sarulla in 1989-1990. The exploration
has been a long program identified several high-temperature
and interesting prospects in the greater Sarulla area, in a tectonic
story, from the graben associated with strands of the Great
early exploration Sumatra Fault
by PERTAMINA, Zone. Further
resource discovery geoscientific
by Unocal, and the investigation
commercial and identified four
financing closure by geothermal
SOL. The journey prospects
to the current in Sarulla,
field development including (from
program provides north to south)
a unique learning Namora I Langit,
Figure 1. Location of the Sarulla Contract experience worth Silangkitang,
Area. COURTESY OF UNOCAL
capturing. This Donotasik and
paper outlines a brief history of the Sarulla Sibualbuali (see
geothermal field development highlighting Figure 2). The area
regulatory, legal, technical, and commercial was later referred
challenges the geothermal developers have faced to as the Sarulla
over almost three decades. Contract Area. Figure 2. Four geothermal prospects within the
Sarulla Contract Area. COURTESY OF UNOCAL

24 GRC Bulletin l www.geothermal.org

Resource Discovery
More extensive exploration of the Sarulla
prospect begun in early 1990s, immediately after
the government issued Decree 45/1991, which
provided more flexibility to PERTAMINA, along
with the contractor, to develop geothermal energy in
Indonesia and then sell it either in the form of steam
or electricity to the State Electric Company, PLN.
During this period, Unocal, after having established
an operating geothermal field in Salak, negotiated a
JOC and Energy Sales Contract (ESC) for Sarulla with
PERTAMINA and with PLN, respectively.
In February of 1993 Unocal, PERTAMINA
and PLN signed a JOC and ESC, enabling Unocal
to explore and develop geothermal energy in the
Sarulla Contract Area. The JOC gave Unocal the
right to explore for, and produce geothermal power
from, the Sarulla contract area as a contractor to
PERTAMINA while the ESC states the terms under
which the geothermal power is to be purchased by
PLN. The contract area is approximately 15 by 63
km in dimension elongated in a NW-SE direction,
located within the Sumatra volcanic arc and along
the active Great Sumatra Fault System (GSF),
covering four prospect areas.
Significant exploration of the Sarulla block
began shortly after the signing of the contract,
involving extensive field geologic and geophysics
surveys in 1993 and 1994. The geologic mapping
consisted of 8 months of fieldwork and analysis of
280 geochemistry samples, as well as geophysics
data from 720 gravity stations, 500 Time-domain
electromagnetic (TDEM) stations, and 240
Magnetotelluric (MT) stations.
Following these exploration surveys, Unocal
drilled a total of 13 deep exploration wells in
three of the prospects in Sarulla between 1994 and
1998 (Figure 2), discovering a total of 330 MW of
commercial geothermal resources:
210 MW proven resource in the Namora-I-
Langit field. Four (4) exploration wells have
been drilled in this prospect.
100 MW proven resource in the Silangkitang
field. Five (5) exploration wells have been
drilled in this prospect.
20 MW proven resource in the Eastern
Sibualbuali field. Four (4) exploration wells
were drilled in this area.
The four wells drilled in the Namora-I-Langit
field were all highly productive, encountering
a large, high permeability geothermal system.
The wells all produced fluids with temperatures
in excess of 260C, with a maximum measured
temperature of 276C. Three of the wells produced
neutral Na-Cl brine, but the fourth produced a
low-pH Na-Cl-SO4 fluid. The permeability of the
Namora-I-Langit system appears to be widely
distributed and is not directly controlled by the
Great Sumatra Fault.
Two out of five wells drilled in the Silangkitang
field encountered a strong upflow zone with fluid
temperatures in excess of 310C. A large-diameter
well drilled in this zone is capable of producing
fluid sufficient for 50 MW equivalent of generation,
and has a maximum flowing wellhead pressure of
more than 60 bar. Unlike at Namora I Langit, the
permeability of the Silangkitang system appears to
be strongly controlled by the Great Sumatra Fault.
Four wells drilled in the Eastern Sibualbuali
geothermal field were all productive, finding
a geothermal system whose temperature and
permeability structure is strongly controlled by the
Great Sumatra Fault. The maximum temperature
measured in the Eastern Sibualbuali wells is 267C,
but production zone temperatures are in the 218-
248C range. Volumetric and reservoir modelling
evaluation of the drilled portion of the Eastern
Sibualbuali geothermal system suggests reserves of
sufficient energy to generate 20 MW of electricity for
30 years.
Significant additional potential remains in
the Sarulla block in the undrilled portions of the
Sibualbuali and Namora-I-Langit fields as well as in
the undrilled Donotasik prospect.
Figure 3. Exploration drilling activities in Sarulla between 1994 and 1998.
COURTESY OF UNOCAL
March/April 2015 25
Commercial Renegotiations
After exploration confirmed a resource of
330 MW, planning for the construction was
underway in 1998, when the government, through
Presidential Decree 05/1998, postponed the Sarulla
project following the Asian financial crisis that
hit Indonesia. Nevertheless, during this difficult
period, Unocal continued to complete the resource
feasibility study, and submitted a Notification of
Reserve Confirmation to PERTAMINA in 2000.
In 2002, the government issued Presidential
Decree 15/2002 effectively rescinding the
postponement of the project. After re-negotiation
with PERTAMINA and PLN, Unocal finally agreed
to pull out from the Sarulla project in the third
quarter of 2003, and sold its interests and rights to
develop to PLN for $60 million.
In 2004, after a law to promote private sector
participation in the geothermal sector was signed,
PLN opened an Independent Power Producers
(IPP) bidding process for the Sarulla development
rights, and in 2006 the Medco-Ormat-Itochu
Consortium won the tender to develop the project.
In 2007 Kyushu Electric Power Co Inc. joined the
consortium.
An Indonesian special purpose company, Sarulla
Operation Limited (SOL), was then established by
the consortium members, acting as the operating
company for steam resource development, and
construction and operation of plant facilities
under the framework of a Joint Operating Contract
(JOC) with the concession holder, PERTAMINA
Geothermal Energy (PGE), a subsidiary of PT
PERTAMINA.
After a long process of renegotiations, in April
2013 SOL signed a Joint Operating Contract (JOC)
with PT PERTAMINA Geothermal Energy (PGE),
which grants SOL the rights to use the geothermal
field. An Energy Sales Contract (ESC) for the 330 MW
Sarulla geothermal power project was signed in the
same month with PT PLN, which will off-take the
energy produced by the geothermal power plant for
30 years.
On March 28, 2014, the Consortium signed the
financing agreements with a syndicate comprised
of the Japanese Bank for International Cooperation
(JBIC) and the Asian Development Bank (ADB),
acting as Lead Structuring Banks (ADB acting both
in its own capacity, as well as an implementing
agency for the Clean Technology Fund and for
the Canadian Climate Fund), plus six commercial
lenders: Sumitomo Mitsui Banking Corporation
26 GRC Bulletin l www.geothermal.org
(SMBC), Socit Gnrale (SG), National Australian
Bank (NAB), Bank of Tokyo Mitsubishi UFJ (BTMU),
Mizuho and ING. JBIC also provides political risk
guaranty for the portion of the loan provided by
commercial lenders, under an EPRG policy (Figure
4).
Figure 4. Sarulla Project Structure SOURCE: PFI ASIAN BEST
PRACTICE REPORT
Going Forward New Era of Geothermal Energy
Converter Technology in Indonesia
The Sarulla Operations Limited (SOL) has
formally given notice of its intention to develop a
geothermal power plant of approximately 330 MW
capacity in the Sarulla Contract Area. Following
the financing closure, the project construction
and development well drilling are currently
underway at Sarulla. The project will develop two
geothermal resources, Namora-I-Langit (NIL) and
Silangkitang (SIL), for a total of 330 MW generation.
PT. Halliburton Logging Indonesia is the drilling
contractor and Integrated Process Management
(IPM) contractor to SOL. PT. Thermochem Indonesia
is the well testing subcontractor to Halliburton for
all well testing services, reservoir engineering and
geochemical consulting, and well test equipment
supply (LECM, piping, PTS tools, cap tubing,
instrumentation).
Due to the large size of development, the project
will be constructed in three phases of 110 MW
each, starting with the 110 MW Silangkitang Plant
development, scheduled to be completed by the end
of 2016. The subsequent NIL I and NIL II Plant at
the Namora-I-Langit field are scheduled to follow
approximately 12 and 18 months after, respectively.
Following a comprehensive evaluation of
the Silangkitang and Namora-I-Langit resource
thermodynamics and fluid characteristics, the plant
will use Ormat's Integrated Geothermal Combined
Cycle Power Plant (IGCC) technology which is more
efficient than conventional steam power plants
(see Figure 5). These will be the first plants of this
type in Indonesia, although the technology is well
established at other high-enthalpy geothermal fields
worldwide.
The IGCC consists of a back pressure steam
turbine and Ormat Energy Converters (OEC
Vaporizers) heated by the low pressure steam
exiting the topping steam turbine (combined cycle).
The steam exits the turbine and enters the OEC
vaporizer at just above atmospheric pressure. The
brine OEC units utilize the brine as it leaves the
separation station (conventional brine binary units).
This
technology
allows nearly
100% injection of
the geothermal
fluid back into
the reservoir,
maintaining the
sustainability of
the geothermal
resource thus
increasing
power. A
portion of the
noncondensable
gas (NCG) will
Figure 5. Schematic diagram of the Geothermal
combined cycle schematic diagram SOURCE: also be injected
ORMAT TECHNOLOGIES INC. with the brine
and condensate.
The steam in the IGCC is condensed at
a pressure slightly higher than atmospheric
pressure, allowing the NCG to be removed from
the condenser (OEC) without an expensive,
power consuming vacuum pumping system or
steam consuming ejectors. Another significant
advantage of the back-pressure is that the NCG
does not contain oxygen which is always present
in conventional vacuum-condensing plants, which
suffer from air in-leakage.
The IGCC technology utilizes separated brine,
producing more power from the same amount of
fluid extracted from the reservoir than conventional
flash plants. The cooled brine is mixed with the
condensed steam and a portion of the NCG,
providing pH-modification that is inherent to the
process, without the need for costly sulphuric or
hydrochloric acid to reduce the potential for silica
scaling. Thermochem Inc. has performed chemical
process design services for Ormat on the plants and
is conducting pilot testing for SOL to validate this
process during the well testing phase.
The power from Silangkitang will be transmitted
to a substation at Namora-I via a 20km long, 150kV
transmission line. This will be the interface point
where PLN will construct a new transmission line to
transmit power to the national grid.
Game changer for geothermal development
in Indonesia
The Sarulla Geothermal Power Project will be the
largest geothermal construction project in Indonesia,
double the previous Salak 165 MW expansion
project constructed more than 15 years ago. From
a regulation stand point, the project is unique in
the way that its underlying contract is under the
old generation geothermal legislation framework,
but it is the first geothermal project in Indonesia to
benefit from Indonesian Government support in the
form of a Business Viability Guarantee Letter under
regulation 139, which was previously not available.
This new form of government support is crucial for
any limited recourse financing project going forward
in Indonesia.
The Sarulla Project is the first Greenfield
geothermal power project in Indonesia in a long
time to have closed with limited-recourse project
financing since the Unit 1 Wayang Windu Project
in 1997. The Sarulla Project took an alternative
approach by financing all three separate power
generating units as an integrated whole, different
from many other geothermal projects that are
typically financed on a unit-by-unit basis due to
the need to prove up the projects reserves. The
integrated nature
of the project
financing for the
Sarulla project
meant that the
bankability
depended
on a detailed
reserve analysis
and thorough
due diligence
reports provided
by lenders
independent
consultants. n Figure 6. The first new well tested at Namora-
I-Langit, shown flowing through Thermochem
LECM well test facility in February, 2015.
March/April 2015 27