The Government continues to encourage downstream efforts and acceleration of coal added value increase by the coal into dimethyl ether (DME) processing program or coal gasification, to be used as an alternative to LPG, which import figures continue to rise every year.
Based on the Ministry of Energy and Mineral Resources data, LPG imports in 2020 have reached 77.63% of the total national need of 8.81 million tons. Without downstream coal efforts, the ratio of LPG imports could increase to 83.55% of the total demand of 11.98 million tons in 2024.
PT Bukit Asam Tbk (PTBA) as the pioneer in developing the coal downstream business is committed to maintain national energy sustainability by building a coal into DME gasification plant located in Tanjung Enim, South Sumatra.
PTBA plans to sign the gasification project development cooperation business agreement in November 2020 with PT Pertamina (Persero) and Air Products and Chemicals, Inc. (USA) as an investor.
Construction preparation of the Coal to DME project will begin in early 2021 and the factory is targeted to operate in the second quarter of 2024. Stipulated in Presidential Regulation No. 18/2020, this downstream project is approved by President Joko Widodo as part of the Priority Project.
In line with President Joko Widodo's vision, this coal downstream program and increase of coal added value can certainly provide a number of benefits and positive impacts for Indonesia, such as:
- The construction of a coal into DME gasification project will bring in investment of USD2.1 billion or equivalent to IDR32 trillion to Indonesia resulting in economic growth
- The plant construction will utilize PTBA's potentially unsold low-calorie coal reserves of 180 million tons for 30 years
- The coal gasification plant will process 6 million tons of coal per year to be converted into 1.4 million tons of DME, which will help reduce LPG imports by more than 1 million tons per year
- The LPG imports reduction can save the country's foreign exchange reserves of IDR8.7 trillion per year or IDR261 trillion in 30 years
Besides the benefits mentioned above, coal downstream certainly also has sustainable or multiplier effects for Indonesia, for examples:
- Direct benefits to the Government in the amount of IDR800 billion per year or IDR24 trillion in 30 years
- Trade balance savings of approximately IDR5.5 trillion per year or IDR165 trillion in 30 years
- Empowerment of the national industry by local workers involvement and total workforce absorption of 10,570 people during the construction phase and 7,976 people during the operation period.
This industrial development study has been comprehensively carried out involving international standards technical, financial, legal consultants and related Ministries and Institutions.
These are concrete steps of the Indonesian government together with State-Owned Enterprises (BUMN) to increase national energy sustainability and reduce dependency on imported LPG fuel.
