PTBA to build $1.5b coal liquefaction plant

The government, state coal mining company PT Tambang Batubara Bukit Asam (PT BA) and Neco of Japan will jointly build a $1.5 billion coal liquefaction plant in South Sumatra, Bisnis Indonesia reported on Friday.

Minister of Energy and Mineral Resources Purnomo Yusgiantoro said the three parties had signed a memorandum of understanding over the establishment of the plant.

It is expected that the plant, with installed processing capacity of 125,000 barrels per hour would be ready by year 2005.

Purnomo said that the planned construction of the coal liquefaction plant in South Sumatra is to maximize the economical use of coal that is scattering in many parts of the province.

The refinery plant would initially process coal supplied by PT BA. It will pay PT BA $8 per ton of coal.

Purnomo said that after the plant is ready, the government would offer it to Pertamina to purchase and operate. But if Pertamina is reluctant, the government would sell it to a private entity.

When asked about the funding, Purnomo said that a number of investors in Japan had expressed their interests. (*)