Indonesia, Japan to team up on coal liquefaction plant project

The government will team up with Japan to build coal liquefaction plants that will provide alternative fuel needed to reduce the country's dependence on oil.

 

The Energy and Mineral Resources Ministry’s research and development division head Nenny Sri Utami said in Jakarta Tuesday that Indonesia should build at least seven coal liquefaction plants, each with the capacity of 27,000 barrels per day to meet the target of fullfilling two percent of the country's fuel needs with liquified coal in 2025.

 

The seven plants need a total investment of US$ 1.3 billion for construction and once they start operation, they will need coal supplies of 35 tons per year. The plants will produce 13,500 bpd in the first stage and the output will be ramped up to 27,000 bpd in 2025.

 

To expedite the construction of coal liquefaction plants, the government and 11 companies have signed a Memorandum of Understanding (MoU) to establish a consortium. They include PT. Adaro Indonesia, PT. Jorong Barutama Greston, PT.Bumi Resources, "tekMIRA",  PT.Rekayasa Industri, PT.Tambang Batubara Bukit Asam (PTBA), PT.Berau Coal, PT. Pertamina (Persero), PT. DH Power, PT. Bayan Resources, PT. Ilthabi Bara Utama and AES Asia & Middle East.

 

Japan will provide the so-called “Brown Coal Liquefaction” technology for the project, she said.

 

Meanwhile, Head of mineral and coal technology division Bukin Daulay said that the consortium would soon work to determine the location for the plant, coal supply, required investment and other related needs. The construction of the coal liquefaction plants is expected to start in early 2009 and they are expected to start operations in 2013.

 

Japanese parties that are eager to take part in the project include METI, NEDO,JBIC, JCOAL, KOBELCO and Sojitz Corp, Bukin Daulay said.

 

“The funds will come from JBIC. But the amount is not yet certain. Possibly 60 percent of the needed US$1.3 billion,” he said. (Godang/Bernard)