PTBA’s Coal Gasification Now a National Strategic Project

The coal gasification project in Tanjung Enim, South Sumatera, initiated by PT Bukit Asam has been listed as a national strategic project through the issuance of Presidential Regulation No. 109/2020, which was signed by President Joko Widodo on November 17, 2020. 

Presidential Regulation No. 109/2020 is a revision to Presidential Regulation No. 3/2016 on the acceleration of national strategic projects. In the previous regulation, the coal gasification project, carried out together by PTBA, PT Pertamina and Air Products and Chemicals Inc., was listed as a national priority project.

In addition to the coal gasification project, the government has also listed the Tanjung Enim Industrial Park as a national strategic project. Tanjung Enim is set to be an industrial park where the development of downstream coal industries will take place.

The coal gasification project’s status upgrade to a national strategic project is a positive sign and a strong support from the government for accelerating efforts to optimize Indonesia’s abundant natural resources in order to boost economic growth as well as ensure equitable development and prosperity for the people as mandated by the Presidential Regulation No. 109/2020.

The coal gasification project is a program to process coal into dimethyl ether (DME) to be used as an alternative to LPG. This project is jointly developed and carried out by PT Bukit Asam, PT Pertamina, as well as Air Products and Chemicals Inc. as an investor. The project’s total investment value is around US$2.1 billion.

The coal gasification plant will annually process 6 million tons of coal into 1.4 million tons of DME. This product will help reduce LPG imports by more than 1 million tons per year.

The drop in LPG imports will save Indonesia’s foreign exchange reserves by 8.7 trillion rupiah per year, or 261 trillion rupiah in 30 years.

In addition to the aforementioned benefits, downstream coal businesses will also bring multiplier effects to Indonesia, including:

- Direct benefits for the government totalling 800 billion rupiah per year, or 24 trillion rupiah in 30 years

- Trade balance savings of around 5.5 trillion rupiah per year, or 165 trillion rupiah in 30 years

- National industry empowerment by involving the local workers and absorbing a total of 10,570 workers in the construction phase and 7,976 workers during the operations

The coal gasification project is not only to be seen from commercial perspective. It must also be seen as a pioneering project to support Indonesia’s energy resilience and independence in the future.