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Govt to prioritize SOEs to work on coal-to-DME projects
While coal gasification technology is not new, very few have ever applied the technology because of its poor economic returns with companies expecting huge incentives to make it worthwhile.
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Downstream industry: Piles of coal are seen on barges on Aug. 16, 2022, in Samarinda, East Kalimantan. (AFP/Adek Berry)
T
he government will prioritize state-owned enterprises (SOEs) to begin work on coal-to-dimethyl ether (DME) gasification projects, the realization of which will determine the future of downstream coal industry development.
The Deputy Energy and Mineral Resources Minister Yuliot Tanjung did not rule out the possibility of inviting private companies to form joint ventures with SOEs.
“[We] prioritize SOEs, but if SOEs have limitations, we will encourage SOEs to work with [private] businesses through a joint venture,” Yuliot said in Jakarta on Friday.
Read also: Danantara to revive costly coal gasification, oil refinery projects
President Prabowo Subianto’s administration has been looking to revive the coal downstream projects left by the previous leadership under former president Joko “Jokowi” Widodo.
Local companies were set to work with Air Products to convert coal into DME and ethanol, but the United States chemical company decided to exit from all downstream projects in Indonesia due to coal pricing policies with its local partner.
The initiative was supposed to involve state-owned mining firm PT Bukit Asam (PTBA) and state-owned oil and gas giant Pertamina, as well as PT Kaltim Prima Coal (KPC) and PT Arutmin Indonesia, both subsidiaries of PT Bumi Resources, jointly controlled by the Bakrie Group and Salim.
