Danantara delays coal-to-DME project groundbreaking
Saturday, February 7 2026 - 08:56 AM WIB
Indonesia’s sovereign wealth fund Danantara has delayed the planned groundbreaking of its coal gasification project to produce dimethyl ether (DME), citing the need for further technical studies to ensure the project’s commercial viability.
The coal-to-DME project, which is intended to substitute liquefied petroleum gas (LPG), was originally expected to break ground on February 6 alongside other downstream projects.
Danantara Chief Operating Officer Dony Oskaria said the project remains part of the government’s list of 18 priority downstream initiatives, but was not included in the first phase due to outstanding assessments, particularly related to technology selection.
“We are conducting a very detailed study to determine which technology to use,” Dony told reporters on Friday (February 6). “The technology choice will determine whether the output is competitive. We do not want to produce gas that cannot be absorbed by the market.”
Dony said the project has not been cancelled and could proceed within the next one to two months once preparations are finalised. State-owned coal miner PT Bukit Asam Tbk (PTBA) is expected to serve as the project operator.
Read also : Danantara to break ground on coal-to-DME project soon
“We hope to announce the DME groundbreaking within the next one to two months, possibly within one month,” he said.
The project had previously stalled after U.S.-based Air Products withdrew as an investor and technology provider, prompting the government to reassess the project structure and economics.
Danantara Chief Executive Officer Rosan Perkasa Roeslani had earlier said the coal-to-DME project was expected to break ground in February 2026, describing it as strategically important for reducing Indonesia’s reliance on imported LPG.
The Energy and Mineral Resources Ministry estimates national LPG consumption will reach about 10 million metric tons in 2026, while domestic production stands at roughly 1.3–1.4 million tons.
The coal-to-DME initiative is part of Indonesia’s broader strategy to reduce LPG imports and strengthen energy security through downstream investment in the coal sector.
Editing by Reiner Simanjuntak