Pupuk Indonesia, Pertamina plan coal gasification plants
Friday, February 19 2016 - 02:06 AM WIB
The paper quoted Director of Upstream Chemical Industry at the Ministry of Energy and Mineral Resources, Muhammad Khayam as saying that one of the plants can already start operation in 2017 to become example for other investors.
He said that Pertamina has a more advanced plans. The company will team up with a coal mining firm and a Chinese company in the coal gasification project, which will not only produce methanol as the final output, but would further process it into propylene and polyethylene, raw materials for plastic production.
Khayam could not yet ascertain the total investment to be made by Pertamina in the project, but the cost for developing a coal-based methanol plant with production capacity of 400,000-500,000 tons per annum is about US$1.6 billion. Moving further to polyethylene and propylene production will double the investment requirement to about $3 billion.
Khayam said that Pupuk Indonesia?s plan to investment in coal gasification plant comes amid talks by the government to end subsidy for the fertilizer industry, thus forcing the company to seek cheaper source of gas as raw material in fertilizer production.
A number of fertilizer companies such as PT Pupuk Sriwijaya Pelambang and PT Pupuk Kujang have also announced plans to develop coal gasification plans in a bid to secure gas supply. (*)