METI to extend coal liquefaction technology to Indonesia

Japan's Ministry of Economy, Trade and Industry plans to provide Indonesia with coal liquefaction technology to produce liquid fuels from coal, Jiji Press reported Monday.

The ministry has concluded that the coal-to-liquid technology, which has been on the shelf due to high costs, will pay off as crude oil prices remain at high levels, ministry sources said.

The technology, developed by Kobe Steel Ltd. and the New Energy and Industrial Technology Development Organization at a cost of about 200 billion yen, liquefies coal at high temperatures and pressures and produces such oil products as gasoline and gas oil.

By 2009, the ministry plans to build a 7 billion yen testing plant in Indonesia, which abounds with brown coal, suited for the coal liquefaction process. Eventually, five plants each with a daily production capacity of some 6,000 tons will be built, the sources said.

The plants are expected to produce coal-derived liquid fuels at an annual rate of 37 million barrels, or 63 percent of Indonesia's crude oil exports to Japan, the sources said.(*)