JAKARTA (RambuEnergy.com) – State-owned coal producer PT Bukit Asam Tbk (IDX:PTBA) expects the coal gasification project the company will develop in collaboration with other parties would come onstream in 2020.
The company estimates the cost to develop the project will reach US$1.2 billion. The project will be located in Bukit Asam Coal-Based Special Economic Zone (BACBSEZ) in Tanjung Enim, South Sumatera.
Bukit Asam President Director Arviyan Arifin said the company is currently seeking funds from investors and banks to finance the project. The remaining funds will come from internal cash-flow.
The company has earlier (Dec. 8, 2017) signed a heads of agreement with fertilizer producer PT Pupuk Indonesia and PT Chandra Asri Petrochemical Tbk (IDX:TPIA) to develop coal gasification plant. Under the plan, the coal will be developed into gas, known as gasification process, before further processed into value-added end products such as synthetic gas or syngas.
Syngas is a raw material to produce Dimethyl Ether (DME), gas fuel, fertilizer as well as polypropylene as a raw material to produce plastics. Through this cooperation, fertilizer industry can utilize coal to produce gas and fertilizer.
Erwin Ciputra added coal-based polypropylene will help Indonesia in meeting it’s domestic demand for polypropylene. At present demand for polypropylene still could not be met domestically therefore Indonesia has to import.
After signing the HoA, the parties involved in the project will conduct feasibility study, environmental assessment and financing and then moving on to selecting EPC (engineering procurement and construction).
The coal gasification plant will have capacity to produce 500,000 tons of fertilizer per year, 400,000 tons of DME and 450,000 tons of polypropylene per annum.
The plant, according to Bukit Asam, would require 5.2 million tons of coal per year as raw materials, while 1 Mt will be used to generate power plant.
Arifin during the launching of the Bukit Asam Coal Based SEZ at the weekend that the output of the plant can be used to replace the imported LPG. At present Indonesia still imports 4.5-4.7 Mt of LPG per ear.
The Industry Minister Airlangga Hartarto expects the project will create 1,400 new jobs and help the nation to save US$7 billion per annum.
Written by Roffie Kurniawan (roffie.kurniawan@gmail. com)