State-owned oil and gas giant Pertamina formed a partnership with Indonesian coal operators, PT Adaro Energy and PT Indika Energy, to develop coal gasification facilities in Indonesia, the Jakarta Post reported. The companies aimed to convert low-rank coal into dimethyl ether (DME), which would replace imported liquefied petroleum gas (LPG). The partnership would hopefully fill the gap in domestic DME supply needed by Pertamina. The switch to DME should lower the consumption of LPG, a fuel the country has been importing heavily.
A Pertamina coal-to-DME plant currently under construction in South Sumatra could replace roughly a quarter of the country’s total imported LPG. Being jointly developed with PT Bukit Asam and U.S.-based Air Products, it is slated to produce 1.4 million tons of DME annually, compared to the country’s need for roughly 5 million tons of LPG annually. Meanwhile, while Adaro is currently looking to develop a coal-to-methanol facility and Indika is pursuing an underground coal gasification facility.