By Rara Suratmi
PT Butonas Petrochemical Indonesia (BPI) plans to invest US$1 billion in a new methanol plant in Bojonegoro, East Java, with an annual production capacity of one million tons, according to a recent report by Sinochem News citing BPI President Director Ignatius Talulembang.
Scheduled for commissioning in 2029, the plant aims to meet rising domestic demand and support Indonesia’s energy transition. It has been designated as one of the 77 national strategic projects for the 2025–2029 period.
Indonesia currently consumes approximately 2.35 million tons of methanol annually, but domestic production stands at only 680,000 tons—resulting in an import gap of 1.75 million tons. The Bojonegoro plant is expected to significantly reduce reliance on imports.
Operations are planned to begin alongside the implementation of Indonesia’s B40 and B50 biodiesel blending mandates. “Methanol is a key feedstock for biodiesel synthesis, and demand is set to rise sharply as the country expands its renewable fuels program,” said Ignatius.
Read also: Butonas secures gas allocation from JTB
French company Air Liquide has been selected as the technology provider for the project. The plant will utilize a steam methane reforming (SMR) process optimized for scalability, energy efficiency, and environmental performance. It will consume 90 million cubic feet of natural gas and 24 million cubic feet of carbon dioxide annually, sourced directly from the nearby Jambaran-Tiung Biru (JTB) gas field operated by PT Pertamina EP Cepu, a subsidiary of state-owned energy company PT Pertamina.
Ignatius confirmed that negotiations for a gas sales agreement with Pertamina are in advanced stages, with signing expected in the fourth quarter of 2025. He noted that the integration of carbon dioxide as a feedstock will not only help lower emissions but also boost methanol output, aligning the project with international low-carbon standards.
In addition to the methanol facility, BPI is also considering the development of a bioethanol plant on the same site to further support Indonesia’s clean energy ambitions. However, that project remains in the early development phase.
Editing by Reiner Simanjuntak
