Indonesian firms signed agreement to build coal to chemicals plant

Major producers in hydrocarbon energy, petrochemicals, and fertilizer - Pertamina, Chandra Asri, and Pupuk Indonesia have signed an agreement in principal with coal mining firm PT Bukit Asam to conduct a feasibility study on coal gasification plant and downstream chemical facilities at the coal-based industrial estate of Tanjung Enim, South Sumatra, Indonesia.

The partners would start to work out on funding agreements for the engineering, procurement, and construction of the 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).

Indonesia is a coal rich nation with reserves are estimated to last about 83 years at the current production rate, containing roughly 2.2 percent of total proven global coal reserves according to the most recent BP Statistical Review of World Energy.

Meanwhile, Indonesia is heavily depending on import PP at the moment and investing partners are hoping to reduce the level of dependency on import once the new coal based PP plant come online.