By Sindi Brahmana
Indonesia’s Powerindo Energi and China National Chemical Engineering Corporation plan to develop a coal to methanol plant in Meulaboh, Aceh Province.
The Ministry of Industry said in a statement that the two companies on Monday signed an MOU to conduct feasibility study in relation to the proposed US$560 million coal to methanol project, which will be located near a coal mine in Meulaboh.
The statement said that the plant will have processing capacity of 1.1 million tons of coal per year to produce 600,000 tons of methanol per year.
"This project will absorb a workforce of 600-700 people. Based on the planning, the project will enter the construction stage in mid-2022," said Minister of Industry Agus Kartasasmita, who witnessed the MOU signing, in the statement.
Agus said that the development of coal downstream project including to process coal into methanol will help multiple benefits for the country including reducing import of methanol, which last year reached 1.2 million tons.
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Director General of Chemical, Pharmaceutical and Textile Industries (IKFT) of the Ministry of Industry Muhammad Khayam said that the methanol produced from this project is expected to be used to help meet domestic needs. "Currently Indonesia has only one methanol producer with a capacity of 660 thousand tons per year, while imports of methanol products each year show an increase due to the growth of the methanol user industry and to support the biofuel program," he said in the statement.
The government has been pushing the country’s coal miners to develop downstream businesses including processing coal to methanol and dimethyl ether (DME), which can be used as substitute for LPG, thus helping to reduce the country’s import of the cooking fuel.
The government has promised various incentives for coal miners investing in downstream projects.
IDX-listed coal miner PT Bukit Asam Tbk is teaming up with state-owned oil and gas firm PT Pertamina and US-based Air Products and Chemicals Inc to develop a coal to DME plant in South Sumatra Province.
Editing by Reiner Simanjuntak
