by Ulisari Eslita
Last week, PT Bakrie Capital Indonesia, Itacha Resources, and US-based chemical company, Air Products, had signed an agreement to build a coal-to methanol production facility in Bengalon, East Kalimantan. All companies will supply the coal feedstock and are committed to taking the methanol production off to sell in Indonesia by 2024.
Air Products would invest $2 billion to build, own and operate the air separation, gasification, syngas cleanups, utilities and methanol production assets to produce methanol for both companies. The facility will provide nearly two millions tonnes per year of methanol, from six million tonnes per year of coal.
In a joint statement released last week, Adika Nuraga Bakrie, CEO of PT Bakrie Capital Indonesia and Agoes Projosasmito, CEO of PT Itacha Resources, said the project would produce high value methanol from abundant, low-value coal reserves. “We are very encouraged by the government’s support for developing cutting edge technology and products in the Eastern region, which will contribute to the overall sustainable economic development of Indonesia,” they said.
Meanwhile, Seifi Ghasemi, Chairman and CEO of Air Products said the company would deploy its capital, technology, and operational expertise to help Indonesia reduces energy imports. “This is another example of our long-term strategy to deploy capital into the high-return strategic industrial gas project,” he said.
Last year, the country’s coal production reached 610 million tones, exceeding the government target by 124.7%. Therefore, the government had raised this year’s production target to 550 million tonnes of coal.
Air Products is a US-based industrial gases company, which focuses on serving energy, environment and emerging markets. It also supplies LNG process technology and equipment.