Bye-bye LPG! PTBA Gasification Mega Project Signed This Month

Jakarta, CNBC Indonesia– PT Bukit Asam Tbk (PTBA) is targeting to sign a coal gasification project into dimethyl ether (DME) with PT Pertamina (Persero) and Air Products this month or November 2020.

“A legal cooperation process is currently being prepared to discuss the draft agreement with Air Products and Pertamina. It is hoped that it will be signed in November this year when all business agreements have been agreed,” said Bukit Asam President Director Arviyan Arifin in a virtual press conference, Friday (11/6). / 2020).

The project, which will convert coal into gas, has a value of US $ 2.1 billion or around Rp. 30.45 trillion (assuming an exchange rate of Rp. 14,500 per US $). After signing the agreement, project development will begin in the first or second quarter of 2021 and start operating in the second quarter of 2024.

“Coal gasification is a pioneering domestic project. EPC will start in the first or second quarter of 2021,” Arviyan added.

Arviyan explained that the investment for the construction of this gasification project, including the production costs, will all be borne by Air Products, a business partner from the United States.

This project uses a BOT alias built-operate-transfer scheme with a period of up to 20 years. In the initial stage, he added, Bukit Asam would only act as a supplier of low-calorie coal for DME raw materials until one year the project runs and then will be given the option to own shares in the following year.

However, after the BOT expires, this project will become a joint venture (JV) project between PT Bukit Asam and PT Pertamina (Persero).

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The coal downstream plant will process as much as 6 million tons of coal per year and process it into 1.4 million tons of DME which can be used as an alternative fuel to replace LPG.

The presence of DME as an alternative fuel can help reduce LPG imports and save foreign exchange. Based on the calculation of the Coordinating Ministry for Maritime Affairs and Investment, the potential for state savings from the PTBA coal gasification project could reach Rp. 8.7 trillion per year.

[Gambas:Video CNBC]

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