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RI to find new partners after Air Products backs out from coal downstream project

Indonesia to find new partner to replace Air Products, which decided to withdraw recently, hoping to continue the coal downstream project nevertheless.  

Deni Ghifari (The Jakarta Post)
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Jakarta
Fri, March 10, 2023

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RI to find new partners after Air Products backs out from coal downstream project Domestic use only: Heavy equipment is used to stockpile coal at the Kertapati coal terminal belonging to state-owned company PT Bukit Asam in Palembang, South Sumatra, on Tuesday. The government imposed a one-month coal export ban starting on Jan. 1. (Antara/Nova Wahyudi)

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nited States-based chemical industry company Air Products decided to pull out from all coal downstream projects in Indonesia, which include converting coal to dimethyl ether (DME) and coal-to-ethanol gasification projects, Energy and Mineral Resources (ESDM) Ministry said on Thursday.

The DME project was initially done in tandem with state-owned miner PT Bukit Asam (PTBA) and state-run oil and gas giant Pertamina, and the ethanol project was done with PT Kaltim Prima Coal (KPC) and PT Arutmin Indonesia, both of which are subsidiaries of PT Bumi Resources, jointly controlled by the Bakrie Group and Salim.

“Yes, [Air Products] is pulling out from all projects,” Idris F Sihite, the ministry’s acting director general on mineral and coal said, as quoted from Kontan.

Read also: Coal gasification not economically viable: Analysts

Both coal gasification projects are part of Indonesia’s greater vision to build up its industries via downstream and reduce reliance on raw material exports. The government has classified the two as national strategic project (PSN) to signify their importance to the country.

The government hopes the coal gasification project can help replace the costly liquified petroleum gas (LPG) import in the country, which is used as cooking gas.

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The PTBA’s DME project was initially located in Tanjung Enim, South Sumatra, designed to produce 1.4 million tonnes of DME from 6 million tonnes coal annually. It is projected to require US$2.1 billion of investment.

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