Govt prepares regulation on underground coal gasification

The Ministry of Energy and Mineral Resources is drafting regulations on underground coal gasification to facilitate growing interests in the highly potential sector.

Kontan quoted Director for Coal and Mineral Management Program at the ministry Sri Rahardjo as saying Tuesday that he had recently visited Germany for comparative study to look into coal gasification technology and regulatory aspect.

He cited as an example that one of the regulations being drafted by the government is on how to determine royalty, whether it should be based on the volume of coal used or output of gas.

Corporate Strategic and Commercial Vice President at PT Medco Energi Mining Internasional F. Hary Kristiono said that Indonesia offers huge potential of underground coal gasification development. Medco has started an underground coal gasification project in Limau, Palembang, South Sumatra, to produce gas for a planned power plant, he said.

Hary said that Medco has set a target for the US$80 million project to be up and running in 2018.(*)