Kaltim Methanol plans new plant in West Papua

PT Kaltim Methanol Indonesia is considering to develop a new methanol processing plant in Bintuni, West Papua, to produce downstream products such as olefin, polyethylene, and propylene, Bisnis Indonesia reported on Thursday.

The paper quoted Director General of Fertilizer, Chemical and Miscellaneous Industries at the Ministry of Industry, Achmad Sigit Dwiwahjono as saying that the ministry was hoping for Kaltim Metanol to cooperate with fertilizer firm PT Pupuk Indonesia, and Ferrostaal, which are planning to develop an olefin center in West Papua.

He added that LG Chemicals were also interested in the planned project.

Achmad said that Kaltim Methanol would not be able to go alone in the project, as it would require huge investment of between US$900 million and $2 billion, depending on the range of downstream products to be developed.

He said that the major challenge for developing the industry in West Papua is the lingering high price of gas raw material. He said the project would require 90 mmscfd of gas. At current gas price of $6 per mmbtu at the producer level, the gas price in West Papua will reach up to $10 per mmbtu, making the planned project to be not commercially feasible. (*)