Govt plans to switch from LPG to DME

The government plans to switch to dimethyl ether (DME) from liquefied petroleum gas (LPG) to reduce energy subsidies, the Ministry of Energy and Mineral Resources announced on Sunday

?DME will help cut LPG imports and it also could be used for households, industry and transportation,? said Saryono Hadiwidjoyo, the downstream director at the ministry?s directorate of oil and gas.

The government is expected to start replace LPG with DME in November 2011, he said.

In July last year, State oil and gas company PT Pertamina signed Sales Purchase Agreement (SPA) with Indonesian firm PT Arrtu Mega Energie (AME) to buy DME.

AME will build coal gasification plant in Pranap, Riau using German technology with an investment of US$1.3 billion.

Under the deal, AME will supply 1.7 million tons of DME to Pertamina for 30 years starting 2011.

DME is an alternative fuel having similar properties with LPG that can be derived from coal, natural gas, crude and biomass. (denny)