Arrtu seeks $1.9b loan from German Bank to develop DME plant

Dimetyl ether (DME) developer PT Arrtu Mega Energie is trying to secure US$1.9 billion loan from Germany?s IKB Deutsche Industriebank to finance its proposed TPA DME plant in West Java and methanol plant in Riau.

President Director Christoforus Richard said he and his team are currently in Germany trying to work out the loan.

Arrtu is planning to build a plant which will turn lignite coal to methanol in Riau which will be able to produce 900,000 tonnes of methanol per annum. Methanol is raw material to make DME. Subsequently, the company will build a 2x400, 000 tonnes per annum DME plant in Eretan, West Java to process methanol from Riau.

According to previous report, Arrtu will get supply of 6-7 million tonnes per annum of lignite from a mining concession owned by state coal mining firm PTBA which is located in Pranap, Riau, where the methanol plant is also planned to be constructed.

State oil and gas company PT Pertamina will only act as offtaker for Arrtu?s DME production and will not have equity participation in the project, he said.

Christoforus said that Arrtu has appointed German contractor Lurgi GmbH as EPC contractor for the two plants and hoped construction could start as early as this year.

According to SPA signed with Pertamina in July this year, Arrtu will start supplying DME to Pertamina in 2011. Under the deal, Pertamina will buy Arrtu?s DME at 20 percent discount to LPG benchmark price CP Aramco.

DME will be used as mixture with conventional LPG.(godang)