Japan’s Mitsubishi Gas Chemical has agreed to participate in an ammonia project in Indonesia, ending its reliance on purchasing fertilizer since halting its own production last year. The project in Banggai Regency on Sulawesi Island is being implemented by PT Panca Amara Utama (PAU), using natural gas feedstock from the nearby Senoro and Toili fields. The plant is already under construction – groundbreaking took place in August 2015 – and commercial operation is scheduled to start at the end of 2017. Capacity will be about 700,000 t/y and total investment costs are projected to be $830 million.

Japanese contractor Toyo Engineering is carrying out engineering, procurement, construction and commissioning services under a turnkey contract.  Technology is being licensed from Halliburton subsidiary KBR. PAU said the project supports the Indonesian government’s program to maximize domestic consumption and add value to its natural gas resources, as well as strengthening the security of the country’s food supply by encouraging fertilizer production.

Mitsubishi Gas Chemical said global demand for ammonia currently stands at roughly 180 million t/y and growth is expected to be driven primarily by its use as a fertilizer. Since discontinuing its own production at the end of July 2015, the Tokyo-headquartered company has had to buy ammonia both to produce derivatives and to supply its customers.