Sector News

Four Indonesian firms collaborate on coal-to-chemicals project

December 13, 2017
Energy & Chemical Value Chain

Indonesia is planning a major move into coal-based chemicals and fertilizer production. The major hydrocarbon energy, petrochemicals, and fertilizer producers—Pertamina, Chandra Asri, and Pupuk Indonesia—on 8 December signed an agreement in principle with the coal mining firm PT Bukit Asam for a feasibility study into a coal gasification plant and downstream chemical facilities at the Bukit Asam coal-based industrial estate at Tanjung Enim, South Sumatra, Indonesia.

The partners will also begin to prepare funding arrangements for an engineering, procurement, and construction project.

The gasification plant would consume around 9 million metric tons/year of low-rank coal as feedstock and is expected to begin production in November 2022. The partners expect syngas from the plant to support production of 500,000 metric tons/year of urea, 400,000 metric tons/year of dimethyl ether (DME), and 450,000 metric tons/year of polypropylene (PP).

Pertamina’s president director Elia Massa Manik said that the cooperation of the two state-owned companies, Pertamina and Pupuk, with Bukit Asam and Chandra Asri is a strategic step in national energy security, promoting the use of DME as a fuel, and for the development of the petrochemicals industry. Chandra Asri’s president director Erwin Ciputra said that Indonesia’s current production of PP is insufficient to meet domestic demand, so coal-based production of the polymer would help reduce the continually rising level of imports.

By Natasha Alperowicz

Source: Chemical Week

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