Japanese firms to launch coal gas production in Indonesia: Report

Ishikawajima-Harima Heavy Industries Co. will join forces with trading house Sojitz Corp. to launch gas production in Indonesia, using less expensive, low-grade coal, the Nihon Keizai Shimbun reported Wednesday.

They will build refineries on the islands of Java and Sumatra. The facilities will be capable of processing brown coal to produce gas comparable in quality to natural gas. The total investment is estimated to exceed Y100 billion.

As a first step, an experimental facility with the capacity of processing 30-50 tons of coal a day will be established in western Java to power a fertilizer plant. By 2011, it will be replaced by a commercial plant capable of processing 1,000 tons of coal a day. One ton of coal can make 400-700 cu. meters of gas.

In addition, the two firms will construct one of the world's largest brown coal gas plants in southern Sumatra that can process 10,000 tons of coal a day by 2013. Gas will be supplied via pipelines to meet demand in Java.

With global demand rising for gas to generate power, the two firms are considering venturing into China as well. (*)