Indonesia starts work on 2.3 billion USD coal gasification plant

Indonesian President Joko Widodo at the groundbreaking ceremony (Photo: market.bisnis.com)

Jakarta (VNA) - Indonesian President Joko Widodo on January 24 launched the construction of a 2.3 billion USD coal gasification plant, in a bid to reduce the country's liquefied petroleum gas (LPG) imports while optimising its coal resources.

The plant is designed to utilise 6 million tonnes of low rank coal to produce 1.4 tonnes of dimethyl ether (DME) annually, which can reduce Indonesia's LPG import by 1 million tonnes per year, according to state coal miner Bukit Asam which is building the plant in partnership with US firm Air Products and Chemicals, Inc.

The plant is in Muara Enim, South Sumatra, a mining hub of state coal miner Bukit Asam. Construction is slated to take 30 months and state energy company Pertamina is expected to use gas produced from the plant.

Last year, Indonesia consumed 7.95 million tonnes of LPG, of which 6.4 million tonnes were imported, according to Government data.

Indonesia allocated 66.3 trillion rupiah (4.6 billion USD) in the 2022 budget to subsidise some domestic LPG consumption.

The country's LPG imports are expected to decline by six times in 2025 from current levels, as it seeks to ramp up coal gasification, which is on a government "priority" investment list offering incentives such as tax breaks./.

VNA