Three Indonesian firms – Pertamina, Chandra Asri and Pupuk Indonesia – have signed an agreement in principle with local mining group Bukit Asam to look at the feasibility of building a coal gasification plant and downstream chemical facilities. The complex would be located at Bukit Asam’s coal-based industrial estate at Tanjung Enim in South Sumatra.

“We want to create added value, transforming coal downstream with gasification technology, by creating end products that have a higher selling opportunity than coal products,” said Arviyan Arifin, president director of Bukit Asam.

The partners will now also start preparing funding arrangements for the project’s engineering, procurement and construction.

The gasification plant, which would consume around 9 million t/y of low-rank coal, is expected to begin production in November 2022. The companies estimate that syngas from the plant would meet demand for 500,000 t/y of urea, 400,000 t/y of dimethyl ether (DME) and 450,000 t/y of PP.

Pertamina’s president director, Elia Massa Manik, said the cooperation of the two state-owned companies, Pertamina and Pupuk, with Bukit Asam and Chandra Asri is a strategic step in national energy security, promoting the use of DME as a fuel, and for developing the country’s petrochemicals industry from coal.

Chandra Asri’s president director Erwin Ciputra noted that Indonesia’s current production of PP is insufficient to meet domestic demand, so producing the polymer from coal would help reduce the large volumes of imports that continue to grow.